How are structured products priced in the secondary market?
The price of a structured product in the secondary market will vary in line with a number of factors including:
- The price/performance of the underlying asset
- Interest rates
- The credit risk of the issuer
This means that a structured product can trade either above or below its par value. This can provide an opportunity to purchase a structured product in the secondary market at a discount to par. The investor may be able to achieve an enhanced return either by selling it later in the secondary market if the price has risen or holding the product to maturity.