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How to calculate the residual value of my CBBC after it is called

On any day from the listing date of your CBBC to the last trading day, if the price of the underlying asset reached the call price, a mandatory call event is triggered, and the trading of the CBBC will immediately terminate.

1. When the call price is reached

Category R

Strike price ≠ call price; the settlement price of the CBBC is calculated based on the minimum trading price (in the case of a bull contract) or the maximum trading price (in the case of a bear contract) of the underlying asset from the time of mandatory call event to the end of the next trading session; if the minimum trading price (in the case of a bull contract) or the maximum trading price (in the case of a bear contract) reaches or exceeds the strike price, the CBBC may not have any residual value


2. Settlement of a bull contract


(Scenario 1) The call price is not reached

(Scenario 2) The call price is reached

Strike price of the bull contract

$125

$125

Call price of the bull contract

$128

$128

Settlement price of the underlying stock

$132

-

Minimum trading price of the underlying stock during the observation period

-

$126

Entitlement ratio

100

100

2.1 (Scenario 1) The call price is not reached

The amount you can recover:

= (settlement price of the underlying stock - strike price of the bull contract) / entitlement ratio

= ($132–$125) /100

= $0.07

2.2 (Scenario 2) The call price is reached

The amount you can recover:

= (minimum trading price of the underlying stock - strike price of the bull contract) / entitlement ratio

= ($126–$125) / 100

= $0.01

* Generally speaking, the settlement price of a CBBC is the closing price of the underlying stock on the last trading day; the settlement level of an index CBBC is the settlement level of the index futures contracts in the expiration month. You should refer to the details about the relevant settlement price in the listing document.

# The minimum trading price is the lowest spot price from the mandatory call event to the settlement in the next trading session. If the CBBC is called in the morning, the observation period will be up to the afternoon trading session the same day; if it is called in the afternoon, the observation period will be up to the noon session of the next trading day. In the worst case where the minimum trading price of the bull contract is equal to or lower than its strike price, you will not get any residual value.


3. Example: Bear Contract (Category R)


(Scenario 1) The call price is not reached

(Scenario 2) The call price is reached

Strike price of the bear contract

$135

$135

Call price of the bear contract

$130

$130

Settlement price of the underlying stock

$128

-

Maximum trading price of the underlying stock during the observation period

-

$131

Entitlement ratio

100

100

3.1 (Scenario 1) The call price is not reached

The amount you can recover:

= (strike price of the bear contract - settlement price of the underlying stock) / entitlement ratio

= ($135–$128) / 100

= $0.07

3.2 (Scenario 2) The call price is reached

The amount you can recover:

= (strike price of the bear contract - maximum trading price of the underlying stock) / entitlement ratio

= ($135–$131) / 100

= $0.04

* Generally speaking, the settlement price of a CBBC is the closing price of the underlying stock on the last trading day; the settlement level of an index CBBC is the settlement level of the index futures contracts in the expiration month. You should refer to the details about the relevant settlement price in the listing document.

The maximum trading price is the highest spot price from the mandatory call event to the settlement in the next trading session. If the CBBC is called in the morning, the observation period will be up to the afternoon trading session the same day; if it is called in the afternoon, the observation period will be up to the noon session of the next trading day. In the worst case where the maximum trading price of the bear contract is equal to or lower than its strike price, your will not get any residual value.

Disclosures:

Moomoo is a professional trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC. 

Any illustrations, scenarios, or specific securities referenced herein are strictly for illustrative purposes. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. 

Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks.

Diversification is an investment strategy that can help manage risk within your portfolio, but it does not guarantee profits or protect against loss in declining markets.

Risk Factors for Structured Products: Structured Products are non-collateralized products. If the Issuer and its guarantor are insolvent or default, investors may not recover part or all of the amount due. The warrants, inline warrants and callable bull/bear contracts are structured products which involve derivatives. Do not invest in them unless you fully understand and are willing to assume the risks associated with them. The price of the Structured Products may fall in value as rapidly as it may rise and investors may sustain a total loss of their principal invested. Callable bull/bear contracts have a mandatory call feature and may be terminated early, in such case, an investor may not receive any cash payment; or the residual value may be zero. You should conduct risk assessment for yourself and ensure that you understand the nature andrisks of the Structured Products and should, where necessary, consult your own legal, tax, accounting, financial and other professional advisers to ensure that any decision to invest in theStructured Products is suitable with regard to your specific circumstances and financial position. Before investing in the Structured Products, you should carefully review and understand theterms and conditions of the Structured Products, together with the financial statements andother information of the Issuer, as set out in our base listing document (including any addendum), and the relevant launch announcement and supplemental listing document.