A forward plus in which the trigger/ reset risk fades out linearly (on a one-to-one basis) over time. The holder can proportionately participate in any favorable upside movement in the sport price until the reset trigger event (knock out trigger) takes place, in which case the holder can stop or mitigate the participation loss associated with this position.

An example is a fader forward plus in which participation is set at 50% of the notional amount. It provides full protection (100%) in the worst case scenario and better participation (on the best case scenario, improvement by 50%). With the passage of time, participation gets locked-in, with some potential for improvement as time passes by.

This structure is by nature zero-cost as the holder doesn’t incur costs on the position (i.e., premium is zero).