Glossary
Not sure about the terminology? This is the place to find out what everything means.
K
key features
This is a document produced by each unit trust providing key features e.g. it states the investment strategy and aims of the trust
Knock-out
The pre-determined level at which the Turbo loses and the Investor’s position is closed. It is the same as the strike level. For a long turbo, the turbo has value as long as the index is above the Knock-Out (KO) level, and for a short, below that level. If the underlying touches the KO barrier then the Turbo will terminate and will expire at a small redemption value. The maximum loss is the initial investment. For Turbos on single stocks a Redemption Value is calculated (the day the KO barrier is hit) by taking the lowest price level of the underlying for Long Turbos (highest prices for Shorts) during the 30 minutes following the KO being breached. Turbos on indices will expire worthless. The period of 30 minutes do not apply here as there is no Redemption Value calculated. Remember : for Turbos on indices, Strike = Knock-Out barrier.
