What do you mean, knock in and knock out?
The snowball structure is essentially a kind of exotic options, with knock-in and knock-out conditions, and the final income depends on the performance of the underlying assets and whether there are knock-in and knock-out events.
If the price of the linked assets rises to a certain level (bid), the snowball product will be terminated in advance, and investors will get fixed income during its existence;
If the price of the underlying asset falls to a certain level (purchase price), the profit and loss situation will be determined according to the price of the underlying asset on the maturity date, and investors may face the risk of the underlying asset falling;
If the underlying assets never touch the bid price and the bid price, then investors will get a fixed income throughout the product period.
Snowball product is essentially a kind of exotic options with barrier clauses, and it is one of the most popular overseas option structures, and its linked target is usually an index or a stock.
Snowball structure products provide some downside protection, but at the same time, they express a moderately bullish or fluctuating view. As long as the underlying asset price does not fall sharply within a certain period of time, the longer the holding period, the higher the investor's income, and it is expected to obtain the agreed full-term coupon income. Similar to the process of snowballing, as long as there are no big obstacles in the path, the snowball will roll bigger and bigger.
In short, the snowball structure sets the knock-in and knock-out conditions, and the final income depends on the performance of the underlying assets and whether there are knock-in and knock-out events.
When the price of the underlying asset rises to a certain level (bid), the snowball product will be terminated in advance, and investors will get the agreed income during its existence; If the asset price of the linked target does not rise to a certain level (purchase price) and does not fall below the purchase price on the observation day, the investor will get the agreed income during the whole product period; If the price of the underlying asset does not rise to a certain level (bid price) on the observation day, and once it falls below the bid price, the investor will determine the profit and loss according to the price of the underlying asset on the maturity date, and bear the risk of the underlying asset falling.