Glossary - B

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.

Back to back product

This is the term sometimes used to describe a product in which the investment is split between two separate elements. Typically one element is a deposit of a one year term paying a high fixed rate and the other element is a structured product linked to some underlying equity market.


The marketing material used to promote structured products often includes illustrations of how the product would have performed if it had been available at some time in the past. This analysis is called backtesting.


Deposit in Danish.

Barrier Level

A barrier or trigger level is a pre-specified level for the underlying that triggers a change in the potential product return.

Typically a barrier level is a feature of a high-income product or reverse convertible product. In these products it means that if the level is reached during the term of the product then the investor is then exposed to a risk of capital being reduced if the underlying index finishes below its initial level.

In general barrier options are options that can only be exercised if the barrier level has either been reached or not been reached, depending on the condition of the contract, during the term of the option (see also knockout/knockin).

Basket option

A basket option is an option for which the underlying is more than one index or share. So for example an option that pays out based on the performance of the FTSE100, DJ Eurostoxx50 and S&P500 would be called a basket option.


A return based on a percentage of the fall in the underlying.

Bear spread

This is the name given to an option trading strategy that is designed to benefit from a fall in the stockmarket. The strategy involves buying a put option and selling another put option with a lower strike price.


This is an index of the largest 20 stocks in Belgium.

Belgische bevek / Sicav belge

Investment fund liable to the Belgian law. This is an investment fund in which the amount of capital in the fund varies according to the number of investors. Shares in the fund are bought and sold based on the fund's current net asset value.

Belgische verzekering (Tak 23) / Assurance belge (Br. 23)

Assurance investment liable to the Belgian law

Best-of option

A best-of option is an option that is exercisable against the best performing of a given number of underlying shares or indices. For example a call option on the best of the FTSE100 and S&P500 would pay out on the index that rose the most during the term of the option. See also Worst-of option.

Bond Provider

The provider who provides the bond for the product.


A bond is debt issued by either a government or corporate entity. Bonds are often listed instruments and are traded on an exchange. Most bonds pay a fixed coupon or interest payment and have a finite term. The chance of a bond defaulting is often indicated by the credit rating (i.e. AA) given to the bond provider.

Bonds are often used in creating structured products (see Medium Term Note and Zero coupon bond).

Bono Estructurado

Structured bond (in Spanish)

Bonus Level

The fixed capital return besides the nominal amount which investors receive at maturity provided a predetermined barrier has not been triggered during investment.

Bull Bear

A return based on a percentage of the rise, as well as a percentage of the fall, in the underlying.

Bull spread

This is the name given to an option trading strategy that is designed to benefit from a rise in the stockmarket. The strategy involves buying a call option and selling another call option with a higher strike price.