… rising underlying prices?
With rising underlying prices the discount certificate tends to rise as well, with the cap marking the maximum possible return. This means that in the case of rising underlying prices, the discount certificate approaches its cap.
… stable underlying prices?
With stable underlying prices the discount certificate rises over the course of time while approaching maturity. This happens because the discount of the certificate decreases until maturity, at which point the price of the certificate equals the price of the underlying. This is a prime example of the sideways yield.
… falling underlying prices?
With falling underlying prices, the certificate falls as well. However, since the discount certificate was bought at a discount to the underlying, the loss is lower by the amount of the discount then it would be for the underlying.