With a turbo investors can realise their personal market opinion with little money invested. The redemption amount of a turbo depends on the performance of the underlying. At the beginning of the term, the strike price and the barrier are set. For products without a defined term ("open end"), the strike price and barrier are adjusted on a regular basis.
A turbo long profits from rising prices of the underlying. Here, the barrier is set below the current price of the underlying. A turbo short benefits from falling prices of the underlying. Here, the barrier is set above the current price of the underlying. Even the smallest fluctuation in the price of the underlying asset can lead to higher profits due to the leverage effect than when investing directly in the underlying asset. The unlimited earning potential, however, is offset by the risk of total loss of invested capital if the specified price barrier is breached.