A turbo certificate that aims to bet on price decreases. The participation in the downward movement of the underlying will increase as the underlying loses more value (price decrease), and vice versa. The price of a short turbo certificate is expressed in the following function:

p (S_t, t) = max (K_t – S_t, 0)

Where: K_t = K₀ exp {(r- z) × t}

S_t is the market price of the underlying at a given time, t.

K_t is the strike price (it is not constant but rather changes according to the above formula).

r is the short-term refinancing rate (constant).

z is the financing parameter.

The certificate trades at this price. The seller of the certificate (the short) can reverse his/ her short position by procuring a long position at the certificate’s market price (the prevailing price at the time of the transaction).

A bear turbo certificate is also known as a put turbo certificate or a short turbo certificate.