Introduction
If you are a traditional investor, you will be pretty familiar with the snowball derivatives, a popular product with a total sell scale of 400B dollars according to the data of SRP. It is ok if you don’t, please follow up by reading this introduction so that you will understand the features, payout structures, and purchase information.
The Metalpha snowball is one of the autocallable structure products, which is a popular structured product that pays a high coupon if the underlying crypto price passes an upside barrier, at which point it automatically matures and the investor’s principal is returned with a high yield.
Investing Note
Fundraising Opens: Every Monday, Thursday at 17:00 (UTC+8)
Fundraising Ends: Next Monday, Thursday at 17:00 (UTC +8, Open day +7 days)
The initial price will be determined 3 hours later at the end of fundraising(20:00, UTC +8). An email will be sent to investors at 20:30(UTC +8)
Lock-up Period: See TBA
Settlement day: The lock-up period ends with the settlement day. Cashback to the investor’s account usually takes 1.5 hours to settle, and also an auto-reinvest manner is recommended.
Knock-in/out Observation Time: 15:30 SGT at Observation Day
Price Reference: Binance Spot Price (Denominated in USDT)
Product Features:
1. Attractive Coupon. The product can gain high potential returns.
2. Callable Feature. A call back is triggered if the underlying cryptocurrency closes at or above the callable prices on a periodical observation date. Investors benefit from the callable feature which can potentially shorten the holding period to a very short period of time.
3. Superior Returns in Range-trading Markets. Appropriate for investors who are either moderately bullish or who hold a “range-trading” view about the underlying currency.
4. Buying cryptocurrency at a discounted price. Potentially the product can be converted into target cryptocurrency at a discount to the current price.
Payoff Features:
1. If the price of the underlying is at or above the Knock-out price on a Knock-out Observation Date, the investor will get 100% principal back immediately and the Knock-out Coupon.
2. If there’s no Knock-out and the price of the underlying has never fallen to or below the pre-determined barrier price at any time during the investment term, the investor will get 100% principal back and the Bonus Coupon at maturity.
3. If there’s no Knock-out and no Knock-in, and the Final Price is below the Strike Price, the investor will get the initial investment converted into Target Currency at the Strike Price.
Payoff Diagram:
Scenario Analysis:
For the given sample terms like the following:
Scenario 1:
On an AutoCallable Observation Date, the price of the Underlying is at or above the Callable Price
- On the 3rd Observation Date, Underlying Price (107%) is above the Callable Price(105%). On this observation date, the product will be early redeemed.
- The investor receives 100% Principal back and a 30% p.a. coupon in USDT.
Scenario 2:
The underlying price is below Callable Price on all the AutoCallable Observation Dates (including final) but is above Knock-in Price all the time.
- During the tenor, there’s no early redemption and there’s no knock-in.
- At maturity, the underlying performance is 88% but given there’s no knock-in, the investor receives 100% Principal back and a 30% p.a. coupon in USDT.
Scenario 3:
There is no early redemption but Knock-in has occurred. The Final Price is at or above the Strike Price.
- During the tenor, there’s no early redemption but the underlying price has fallen below Knock-in.
- At maturity, the underlying performance is 90% and is above the Strike Price, the investor receives 100% Principal back in USDT.
Scenario 4:
There is no early redemption but Knock-in has occurred. The Final Price is below the Strike Price.
- During the tenor, there’s no early redemption but the underlying price has fallen below Knock-in.
- At maturity, the underlying performance is 75% and is below the Strike Price, the investor receives the Principal back in BTC with the Conversion Rate at the Strike Price. Effectively investor buys the BTC at the Strike Price which has a 20% discount on the current price.
FAQs:🙋
1. Can I redeem the investment before the expiry date?
Any kind of early redemption is not allowed before the expiry date. Mind this is a closed-end investment product. However, investors will be found their funding back with a high yield return if it triggers the knock-out condition.
2. Where can I find the reference price of BTC and ETH?
A reliable reference where you can find the price of BTC and ETH is on Binance. Besides, we will send you a confirmation email to inform you of every detailed specification of the investment product in that period.
Any Questions? Contact us!💁
Website; Twitter; Telegram; Email: support@metalpha.finance.
