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Trading Turbo's, charges and value
How can I find a Turbo?
You can always find a Turbo using the ISIN code, which remains the same throughout the life of the Turbo. In contrast, the name of a Turbo may change during its life. If the stop-loss limit changes, the name also changes accordingly. For instance: You purchase a Turbo with the name AAB BEL 20 TL 3200. This name breaks down as follows:
- AAB stands for ABN AMRO, the issuer of the Turbo
- BEL 20 stands for the underlying index for the Turbo
- TL stands for Turbo Long (TS stands for Turbo Short)
- 3200 is the stop-loss limit
Since the stop-loss limit can vary during the life of the Turbo, the name of the Turbo you have purchased may change, e.g. AAB BEL 20 TL 3100.
When can I trade Turbos?
You can trade Turbos on Euronext between 9.05 a.m. and 5.25 p.m.
How can I place an order for a Turbo?
Go to Keytrade Bank's secured site and enter the Turbo's ISIN code in the search box. You will automatically obtain the detailed quote of the Turbo, along with the trading form. If you do not know the ISIN code or require further details of the Turbo, you can use the dedicated Turbo search engine (via: Investing > Warrants on our secured site). If you want to place an order, click on Transaction and you will automatically return to Keytrade Bank's secured site, where you can place the order. You fill in the trading form in exactly the same way as for any other financial instruments that can be traded via Keytrade Bank. Because investing in a Turbo is riskier than investing directly in the underlying asset, we suggest that you always work with limit orders.
What is the purpose of the stop-loss limit?
The stop-loss limit ensures that you never lose more than you invest. The stop-loss limit is the price of the underlying asset at which the Turbo automatically expires. The stop loss is adjusted once a month on the basis of the current level of funding.
What charges are levied for trading Turbos?
The charges for Turbos are made up of transaction fees, the custody fee and funding costs. Keytrade Bank's fee for trading Turbos is 14,95EUR per transaction (for orders up to 5000EUR ). The fee is 24,95EUR per transaction for orders between 5000EUR and 50 000EUR . There is no custody fee. The funding costs are incorporated in the price of a Turbo on a daily basis.
What is the value of a Turbo?
The value of a Turbo can be easily calculated on the basis of the following data:
- Price of the underlying asset
- Level of funding
- Exchange rate
In most cases, the value of the Turbo is equal to the difference between the price of the underlying instrument and the level of financing. If the price of the underlying instrument is too high or too low, the Turbo is assigned a certain ratio. For instance: A Dow Jones Turbo has a ratio of 100. This means that you only invest in 1/100th of the Dow Jones when you buy this Turbo, which implies that the value of the Turbo is only 1/100th of the difference between the price of the underlying asset and the level of funding. In the case of underlying assets that are not denominated in euros, you must also bear the exchange rate in mind. However, all Turbos are listed in euros. A rise in the foreign currency against the euro has a positive impact on the value of your Turbo, and a fall has a negative impact. For a quick calculation of the value of a Turbo, you can also use the Turbo calculator.
What is the level of funding?
With a Turbo you only invest part of the value of the underlying asset. The remainder is financed on your behalf by ABN AMRO. The portion financed by ABN AMRO is called the level of funding.
Why is the price sometimes not reported on the market?
ABN AMRO is liquidity provider for its Turbos on Euronext. You are therefore not only dependent on other investors that wish to buy or sell. ABN AMRO's bid and offer prices depend on the following factors:
- Theoretical value of the Turbo
- Underlying instrument
- Supply and demand for the Turbo and the underlying instrument
- Market uncertainty and volatility
Unusual circumstances may mean the ABN AMRO does not report a price - for instance, if trade in the underlying asset is suspended or if a large number of orders are placed in a short period. This is why we recommend that you always use limit orders when trading in Turbos.