A structured financial product/ security that has a heavily path-dependent payoff consisting of an overall minimum guaranteed return, i.e., a global floor, over the contract’s lifetime, plus a variable return (local cap) accumulated over a series of subperiods, which is computed as the lower of the actual percentage change in an underlying index (portfolio) in that period or a fixed ceiling rate.

The simplest form of this contract is the globally-capped product (in which a cap is applied to total returns). Other popular types include the summed locally-capped product (in which caps are placed on the returns of each of several periods. The sum of these returns is then computed) and the compounded locally capped product (which is similar to the summed version, except that the returns are compounded over a series of reset dates).