Common terms for ELI
When you are considering to purchase an ELI, it is important to fully understand its related terms. Common terms include:
Offer period: The period when the ELI is available for purchase from your distributor. However, certain specific terms may only be finalised after you have committed to invest in the ELI.
Investment period: The investment period is the required holding period of an ELI and is usually between the trade date and the maturity date.
Trade date: The date on which the ELI purchase order will be executed by the issuer. All terms are finalised and the initial price of the reference asset(s) is determined on this date.
Issue date: The date on which the ELI is issued.
Final valuation date: Closing price of the reference asset(s) on the final valuation date is recorded to determine the settlement of the ELI at maturity.
Maturity date: Depending on the terms of the ELI, you will receive, at maturity, payment in cash or physical delivery of the reference asset(s).
Nominal amount: The nominal amount is used to calculate the purchase price per ELI and any settlement at maturity.
Purchase price: The purchase price is the amount you pay at the time of your application and may be equal to or less than the principal amount.
Initial spot price: The initial spot price is the closing price of the reference stock on the Trade Date of the ELI, or the prevailing market price of the reference stock at the time of execution of the ELI.
Strike price: The strike price is a predefined reference price and is used to determine the settlement at maturity. It is usually expressed as a percentage of the initial spot price.
Final Price: The final price is the closing price of the reference stock on the final valuation date.