Twin Win on Brent Crude Oil in USD
Twin Win on Brent Crude Oil in USD
Since more than one year there is only one direction for oil prices.The upward direction. But what happens next? Some experts expect further price increases due to successful measures against corona, rising demand, declining inventories and supply cuts. The analyst Christyan Malek from JP Morgan predicts even a new "super-cyclus" with prices of 190 USD for Brent Crude Oil. Others warn cautiousness. Uncertainties regarding possible corona mutants, rising quantities or changes in consumer habits could put downward pressures on prices.
My Analysis
High oil prices leads to further capital accumulations into the research for alternative energy sources. Therefore the Opec will seek to stabilize the prices in a range to maximize the age of oil. Due to huge uncertainties fluctuations should be managed in useful investments. Short-term (12 months) a range from 60 USD - 100 USD is highly probable. Mid-term (36 Monate) you should calculate a range from 40 USD - 120 USD.
Based on this assessment I have developed the following Twin Win Certificates with the maturities 12 months, 24 months and 36 months. Since strong short term fluctuations cannot be excluded, the products are equipped with a european barrier (observation at maturity). These Twin-Win Certificates enable an efficient proxy-hedging as well as a efective pay-off diversification.
TWIN WIN's on Brent Crude Oil in USD
| Currency | USD | |||||||
| Denomination | [USD] 1'000 | |||||||
| Maturity | 12M | 24M | 36M | |||||
| Underlying | Brent Crude OIL (CO1:COM) | |||||||
| Barrier (european) | 75% | 67% | 59% | |||||
| Cap | 125% | No Cap | No Cap | |||||
| Participation up | |100%| up to the cap | |||||||
| Participation down | |100%| up to the barrier | |||||||
| Strike | 100% | |||||||
| Indication | 23.06.2021 | |||||||
| Issuer | Rating A-minimum | |||||||
| Size | [USD] min. 500'000;--- | |||||||
| Issue Price | 100% | |||||||
| Finders Fee | Upon request | |||||||
Redemption at Maturity:
| Brent Crude 12M | +30% | +15% | - 10% | - 24% | - 30% |
| Redemption Twin Win | +25% | +15% | +10% | +24% | - 30% |
| Brent Crude 24M | +50% | +15% | - 10% | - 32% | - 40% |
| Redemption Twin Win | +50% | +15% | +10% | +32% | - 40% |
| Brent Crude 36M | +50% | +15% | - 10% | - 40% | - 50% |
| Redemption Twin Win | +50% | +15% | +10% | +40% | - 50% |
We are happy to customize the relevant components exactly to your personal preferences. Please imagine that the indications can change day by day.
Are you interested in this topic? Please contact us and we will replicate your personal market view "tailor made" with our innovative products. We would be delighted to develop further hedging - arbitrage - or speculation opportunities for you. If you have already exact ideas of your favourite product we'll generate you the best conditions from more than 25 issuers.
Text und analysis by Florian Franz
Partner at Carat Solutions AG
Please find below the chart with the development of the relevant underlyings during the last 36 months:
