A structured product (structured certificate) that provides leverage (gearing), both upside and downside, so that every incremental movement in the underlying would result in a more than proportionate change in the certificate’s returns. The upside is the unlimited upward potential, while the downside is the possibility that the entire principal (invested amount) is lost, subject to underlying movement relative to a barrier level. The barrier is set below the current price of the underlying (for a long turbo certificate).

The leverage effect is crated by having the purchase price of the certificate lower than the direct investment in the underlying. The lower the purchase price, the higher the leverage, and vice versa. Typically, turbo certificates come with a strike price and a barrier. The intrinsic value of the certificate is the difference between the underlying price and the strike price (for a long turbo certificate) or the difference between the strike price and the underlying price (for a short turbo certificate).