Foreign exchange financial products
What is forexcashbackcalculator cashbackforexbtc f cashback forexancial East forex cashback Foreign exchange financial products are individuals who buy financial products in currencies that are only freely convertible into foreign currencies, Eastforexcashback gains are also calculated in foreign currencies Foreign exchange financial products purchased through banks do not require investors to make their own judgments about investment decisions, and are entirely guided by the terms of the products prior design and the banks professional investment staff to invest The behavior is mainly divided into two categories, namely fixed-income foreign exchange products and foreign exchange structured financial products (a) fixed-income products fixed-income foreign exchange products are mainly linked to the underlying assets or investment direction for foreign exchange bonds, in the same term conditions, the return is higher than the same currency foreign exchange deposit earnings, and the risk of loss is almost no but by the financial crisis, central banks have cut interest rates. However, due to the financial crisis, central banks have cut interest rates, resulting in fixed-income foreign exchange products, the income space is shrinking, many domestic banks have stopped offering fixed-income foreign exchange products, and most of them are mainly short-term products, the level of return is even lower Therefore, investors can take into account the exchange rate risk, try to convert to a higher level of interest rates of foreign exchange, you can choose to buy fixed-income financial products or simply to In addition, because fixed-income foreign exchange financial products generally do not allow early redemption, investors must fully consider the liquidity risk of assets, in the phase of rapid fluctuations in the exchange rate, you can choose a shorter-term financial products to prevent risk (ii) structured products Foreign exchange structured financial products have a wide range of investment and linked derivatives, can be linked to commodities, foreign-listed Static is the design structure of the product does not change after issuance; dynamic will make corresponding investment adjustments in response to market conditions The current structured products will set a minimum amount of capital protection, the floating return on the amount of capital protection depends on the performance of the underlying product linked to the product Compared with fixed-income products, the return risk of structured products Although the capital preservation clause is set to ensure that investors are protected from the risk of significant principal reduction, investment in structured foreign exchange products must consider the following aspects of risk 1. Risk Structured foreign exchange financial products are cross-market operation, the underlying investment with the international market interest rates, exchange rates, stock prices or indices, gold and other commodity prices linked to the bank will generally be due to the level of return depends on the actual performance of the underlying (observed value), there are unilateral pegging, bilateral pegging two ways unilateral pegging is only when the price of the underlying pegged investment is all up or all down to gain In addition, banks sometimes pre-determine a fluctuation range, whether unilateral or bilateral, and when the actual observed value falls within or beyond this range, the investor can obtain the return. For example, for a Bank of China financial product linked to H-share red chips, the price of all three stocks rose 110% at the end of the period in order to obtain a 23% yield to maturity, otherwise the actual yield was only 3%. Relatively speaking, the return risk of two-way pegging is less than one-way pegging, because the two-way pegging product maturity return is only related to the absolute value of the volatility of the linked asset price, and the actual direction of fluctuations, in the observation period, as long as the price fluctuations, regardless of gains and losses can be obtained, for example, Citibank a linked five Hong Kong stocks up and down win-win structured products, take the observation period of five stocks minimum The average of the volatility of the five stocks during the observation period to determine the investors return to maturity, as long as these stocks have fluctuations in the observation period, you can certainly gain 2. Redemption risk Some foreign exchange financial products banks have the right to terminate the contract, banks often choose to terminate the contract at a time unfavorable to them, and this is precisely when investors get high returns Currently, there are two main forms of early termination rights set by banks in China: one is The bank can terminate the product in advance when paying the income, the customer does not have the right to terminate the product agreement in advance if you want to terminate the product agreement in advance need to pay a certain amount of liquidity: Second, according to the size of the customers investment products, the customer has the right to early redemption 3. In addition, due to the liquidity restriction, if the market interest rate continues to rise during the holding period, but the yield of the financial products does not rise at the same time, it will also lead to a decrease in the actual level of return of the products. 4. Information disclosure risk Investors often ignore the terms and conditions of foreign exchange financial products, or because of the terms and conditions of the disclosure of professional and obscure and gullible bank sales staff In addition, although banks will disclose the most unfavorable return situation or no guaranteed return in the product description, investors are often confused by the expected high rate of return, especially the disclosure of information about the principal clause In addition, some foreign exchange structured products are designed to be complex and investors simply cannot check the content of the terms and conditions of the relevant underlying investment and other relevant information through the financial product descriptions in a timely manner. In addition, some foreign exchange structured products are designed in a complicated way, and investors cannot check the status of the relevant investment targets and other related information through the terms and conditions in the prospectus of the financial products, so investors can only rely on the product statements sent by the banks on a regular basis to understand the actual investment income status of the products, thus affecting investors investment decisions. Some foreign exchange products linked to the exchange rate of small currencies, especially for ordinary investors, it is more impossible to judge the exact trend, the risk of exchange rate fluctuations is greater. Peso), the European basket of currencies (Turkish lira, Polish zloty, Russian ruble) in the observation period against the U.S. dollar, Japanese yen and euro exchange rate performance of the maximum to determine the yield to maturity because these currencies are non-major foreign exchange currencies, investors are difficult to expect, the risk of zero return is very high In addition, if the currency of the purchase of foreign exchange financial products to choose foreign exchange local currency, you must also consider the holding period As China has no forward foreign exchange products for the RMB exchange rate, ordinary investors can not hedge the RMB exchange rate risk, so investors can try to convert to RMB or choose foreign exchange products priced in RMB foreign exchange financial products risk control measures First, should fully understand their own risk tolerance, familiar with the characteristics of the products planned to invest in advance The two comparisons should be made after a reasonable investment plan. Do not blindly follow the trend, not only look at the product yield and the length of time, but should be a comprehensive consideration of the return and risk of the investment risk tolerance is low, you can take a bank time deposit or fixed income foreign exchange products; affordability is higher, you can buy structured foreign exchange products, with professional knowledge can also try to trade foreign exchange transactions China Banking Regulatory Commission has also issued a series of documents, emphasizing that "before selling financial products to customers, commercial banks should, in accordance with the know your customer principle, fully understand the customers financial situation, investment objectives, investment experience, risk appetite, investment expectations, etc., and establish customer information files; at the same time At the same time, a customer assessment mechanism should be established to design a special product suitability assessment book for different financial products to assess the suitability of the product for the customer, and the customer should sign to confirm the assessment results" Secondly, to purchase foreign exchange financial products, you should fully understand the products linked asset situation and trading rules different linked assets, their volatility risk varies greatly, in general In general, the exchange rate market is much more volatile than the gold market, so investors choose to gold index as the underlying foreign exchange wealth management products suffer less risk of loss; capital market than the currency market is more likely to cause violent fluctuations, linked to the capital market instruments of wealth management products the potential level of risk than linked to the money market instruments of wealth management products to high May 10, 2007 China Banking Regulatory Commission On May 10, 2007, the Office of the China Banking Regulatory Commission issued the Notice on Adjusting the Scope of Overseas Investment of Overseas Wealth Management Business of Commercial Banks, which regulates the investment scope of foreign exchange wealth management products and explicitly restricts them to "not invest in commodity derivative products, hedge funds and securities rated below BBB by internationally recognized rating agencies". Any investment behavior should not be blindly impulsive, biased, should be fully informed of any information disclosed in advance, especially the most unfavorable situation for investors, and then make a judgment, in order to avoid the former Hong Kong residents to invest in Lehman Brothers minibonds such an event occurred again, investors in the choice of foreign exchange financial products, should also weigh their own liquidity needs and investment income between the contradiction for For investors in a poor financial situation in the near future, they should try to choose products with high liquidity or financial products with early redemption clauses, with short-term maturities as the main focus, which of course will inevitably lose some of the opportunities for high returns Finally, any transactions involving foreign exchange, exchange rate risk is the biggest risk, but also unavoidable risk institutional investors can avoid exchange rate risk through hedging and forward transactions, as ordinary Therefore, you can try to choose foreign exchange financial products settled in local currency to avoid the risk caused by exchange rate fluctuations between local and foreign currencies; for financial products settled in foreign currencies, you should first determine a target currency to facilitate investors to lock in gains or stop losses in a timely manner, and specifically choose foreign currencies with better macroeconomics or higher interest rates as the Any risk control measures can only avoid part of the risk, and foreign exchange is a relatively high-end investment behavior, high risk is inevitable, not to mention the complexity of the design of foreign exchange financial products and specialized terms so that professional investors are difficult to understand the operation mechanism behind the product, not to mention the ordinary investors only do their homework in advance, calmly Only by doing their homework, analyzing their own financial situation objectively, and fully understanding the characteristics and risks of the products, can they fully enjoy the happiness of wealth appreciation brought about by foreign exchange wealth management.