Product description

Equita Yield

Description

UBS Equita Yield is a tailor-made investment strategy which can help the investor to increase the profitability on an existing long stock position in sideways markets by exchanging the upside with a fixed yield payment (Covered Calls). Independent of the underlying"s performance during the tenor of the strategy, the investor will receive a fixed yield payment upfront. In exchange, he/she agrees to sell the underlying to the counterparty on the expiration date at the target sales price (cap) if it should close at or above that predefined level. To fulfill this potential obligation the investor is required to physically hold the underlying asset during the whole tenor of the transaction.

Market Expectation

Flat or slightly rising market trend

Profit

Upfront yield payment (premium) in any scenario and potential "target sale" of the underlying at the cap level. Investors upside potential is therefore limited if the underlying closes at or above cap price on expiration date.

Risk

Full risk of stock ownership remains with investor (no capital protection). Furthermore, the underlying has to be pledged to cover for the potential obligation to deliver the stock position on the expiration date. Stock position cannot be accessed as long as the strategy is active.

Payout Chart

Equita Yield
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