Structured products are prepackaged investments that include assets linked to interest and derivatives. Compared with traditional current and term products, structured products feature the risks and returns of derivatives on the basis of the originally fixed income. Therefore, the yield to maturity of structured products is not fixed but generally varies with the price of the underlying assets. Structured products can be divided into principal guaranteed and aggressive types as per the risk level.
Currently, what is listed on Gate.io are SharkFin products. All are capital-guaranteed ones. Users can participate and earn guaranteed returns.
*Income of structured products = returns of fixed-income products + returns of derivatives
In essence, Gate.io structured products are prepackaged investments that include assets linked to interest and derivatives. So why are they considered novel types?
1. First, the investment threshold is low, such as the minimum start position for structured products under USDT is only 1 USDT.
2. Second, the products integrate traditional financial products and derivatives. Thus, they have a "fixed income" feature of traditional products and the "uncertainty" characteristic of derivatives.
3. Finally, participants have a wider range of investment opportunities. Users can select an optimal structured product by analyzing the price trend of the linked currency, and obtain the fixed returns while getting a chance to obtain high yields from derivatives.
Structured products on Gate.io now offer Daily SharkFins (including Sharkfin Special products), Bullish Sharkfins, and Bearish Sharkfins. More products and services will be launched on Gate.io. Please stay tuned!
1: Capital guaranteed. It provides an opportunity for holders to earn without risks.
2: High-yield opportunities. Users who are good at predicting market volatility can get much higher returns than with ordinary financial products.
3: Simple operation. As the complex underlying hedging links have been brought under a structure, users can participate with one click.
1: Lock-up risk. Once participated, the funds will be locked and cannot be redeemed in advance.
2: Value depreciation risk. From the perspective of the standard currency, it is capital guaranteed, but for other valuation methods, there is also a risk of depreciation caused by the downmarket.
3: Investment limit. Limited by the depth of options trading, its investment currencies are usually BTC, USDT, and ETH, and there is also a certain limit to the investment amount, which may fail to meet some users’ needs.
In general, it’s easy for users to participate in SharkFin products, and users can obtain a higher expected rate of return than that of other financial products. It is a low-risk and high-yield financial product suitable for investors who consider gaining long-term value. Meanwhile, investors must know that lock-up risks still exist for the product and it is also under the potential risks caused by market fluctuations. They should know the characteristics of SharkFins well before the subscription.
*Web: Click Homepage>Earn>Structured Products>Subscribe
*App: Click Market>More>Financial Business>Structured Products>Subscribe
Subscribe: Indicates that the product is on sale, and users can click to subscribe
Pending settlement: Indicates that the subscription ended, and the product is locked. It has not yet made a settlement and the interest has not been paid.
Settled: Indicates that the subscription ended, and settlement and interests have been completed. Users can go to "My Finance" to view the settlement details.
Take "Daily USDT SharkFin_20220823" as an example
①As the name tells us, it is a capital-guaranteed daily SharkFin product, the investment currency is USDT, and the interest will be calculated starting from August 23, 2022.
②The minimum annualized rate of return is 3%, the maximum can reach 16%, the investment interest calculation period is 7 days, and the start position is 1 USDT.
③The price range is $21,000-$23,000, and high yields can be obtained if the price always stays within the range during the observation period. The maturity date is August 30, 2022, and the principal and interest will be unlocked at maturity.
④ "Pending settlement" means that the subscription ended, and the product is locked. It has not yet made a settlement and the interest has not been paid. "Settled" means it has already been settled.
⑤ The subscription starts at 4:00, August 22, 2022 (UTC) and lasts till 4:00, August 23, 2022 (UTC). The interest will be calculated starting from 4:00, August 23, 2022 (UTC), and it will expire at 4:00, August 30, 2022 (UTC). The principal and interest will be distributed to users’ accounts after 4:00, August 30, 2022 (UTC) or later.
①The observation mechanism is applied. The observation time is 4:00 UTC every day. The price of the BTC/USDT perpetual contract is the observation price of the day.
②The current BTC/USDT perpetual contract price also indicates that the price of the product is based on the price of BTC. And the price is subject to the price on Gate.io.
③The profit mode chart is consistent with the text description on the left side.
Take Daily USDT SharkFin_20220823 in Q6 as an example. User A subscribed to this product and invested 1 USDT. It takes the price of BTC as the benchmark, and the pegged price is $21,000 and $23,000 respectively. The lock-up period is 7 days, and interest will be issued at maturity. At maturity, the interest can be calculated in two ways.
1: If the price of BTC once fell below $21,000 or rose above $23,000 during the lock-up period, user A can get a 3% rate of return.
2: If the price stays within $21,000-$23,000, user A can get a 3%-16% yield, and the closer the price is to $23,000, the higher the rate of return.
Assuming that the BTC price did not go beyond the price range at maturity, and the settlement price was $22800, user A can finally obtain a 7-day annualized income of up to 14.7%.
* Annualized rate of return at maturity = 3.00% + (end-of-period settlement price-21000)/(23000-21000)*(16.00%-3.00%)
The APR is a standard for measuring the interest earned. It is calculated by Simple Interest and is only related to the ratio of the interest to the invested principal.
*APR = (investment income/principal)/(investment days/365)×100%.
As structured products feature derivatives and the income will fluctuate with the price of the linked currency, it is difficult for investors to obtain the highest rate of return. In this regard, Gate.io’s structured products introduced a price observation mechanism, which can help increase the probability of users obtaining high returns.
After entering the structured products page on Gate.io, select any product and click "Subscribe" to enter the product details page, then view the rules of return. If the mechanism is applied, you can see the content in the red box shown in the following picture.
① Indicates the reference price of the asset linked to the product, and the value is updated in real-time.
②Indicates the observation time corresponding to the index price of the product. The observation time in the picture is 4:00 every day.
For ordinary structured products, once the price of the linked asset knocked out the price range, it is regarded that a knockout happens. However, under the Gate.io price observation mechanism, even if the price goes beyond the price range during the entire observation period, it is still considered that no knockout happens as long as the price of the linked asset stays within the price range at the observation time point.
Take the following figure as an example. Although there have been cases where the price of the linked asset went beyond the observed price range on Day2 and Day4, no knockout happens because the price stayed within the observed price range at each observation time point (that is, at 04:00 every day). Therefore, users gained a high yield. This is where the Gate.io price observation mechanism comes into play.