A certificate that allows investors to participate disproportionately in the price gains compared to a direct investment in a security, commodity or index. In the event of price losses, however, participation (or loss exposure) is evenly proportionate (1:1). Standard outperformance certificates come with features such a strike price and a participation rate.

Once the predetermined price level is hit or exceeded, the price of the certificate reacts to the price development of the underlying with a participation rate exceeding 100 percent (e.g., 1.5:1 or 1.8:1).

In return for the “higher participation” feature, the holders are not entitled and has no claim to any dividends. Rather, the issuer of the certificate is entitled to receives such dividends. Below the strike price, investors get exposed only to the risk associated with a direct investment in the underlying. At maturity, the holder receives at least the price of the underlying for each certificate.

This certificate take many forms, prominently including protected outperformance certificates and spread certificates, which equip the holder with additional capital protection. Sub-categories of this certificate are sidestep certificates, express certificates, sprint certificates, double chance certificates and touchdown certificates.