Glossary - Q
This section provides an explanation for some of the jargon used to describe structured retail products. If you would like us to add additional words then please let us know by clicking here.
Qualified Domestic Institutional Investor Scheme (QDII)
This is a scheme in China that has been set up by the government to allow domestic investors to access overseas markets.
A qualifying investment is one that satisfies the rules laid down by the Inland Revenue for investments into PEP or ISA products.
A quanto option is the name given to a type of option that is denominated in a currency other than the natural currency of the underlying. In particular, the payout of a quanto option does not depend upon the movement of the exchange rate between the two currencies.
For example, an option on the S&P500 index that is denominated in British Pounds is a quanto option if the return is simply based on the movement of the index and not the movement of the index and the movement of the sterling/dollar exchange rate.
Most structured products that provide a link to foreign markets make use of quanto options.