ZigzagBAs

ZigzagBAs are a type of financial instrument that offers investors a unique way to gain exposure to an underlying asset while limiting their downside risk. These products are essentially structured notes with a built-in "barrier" level. If the price of the underlying asset touches or crosses this barrier, the note's principal protection is triggered, and the investor receives their initial investment back. However, if the barrier is not breached, the investor's returns are typically capped at a predetermined level, even if the underlying asset performs exceptionally well beyond that cap.

The "zigzag" aspect refers to the potential for the note to participate in the upside movement of the underlying asset up to the cap, but with the added safety of the barrier. This structure makes them appealing to investors who are moderately bullish on an asset but are also concerned about significant price drops. The complexity of ZigzagBAs means investors need to carefully understand the terms, including the barrier level, the cap level, the maturity date, and the specific underlying asset. Their performance is heavily dependent on the price movement of the underlying asset relative to the defined barrier and cap. They are often issued by financial institutions and are typically traded over-the-counter.