Disclaimer: This product requires ISDA and Dodd Frank documents.
All case studies are shown for illustrative purposes only and should not be relied upon as advice or interpreted as a recommendation. Any name referenced is fictional, and may not be representative of other individual experiences. They are based on current market conditions that constitute our judgment and are subject to change. Results shown are not meant to be representative of actual results or experience of other individuals. Past performance is no guarantee of future results.
Regarding options and other strategies, results and risks displayed in these materials are based solely on hypothetical examples cited; actual results and risks will vary depending on specific circumstances. Investors are urged to carefully consider whether option or option-related products in general, as well as the products or strategies discussed herein, are suitable for their needs. In actual transactions, the investor’s counterparty for OTC derivatives is J.P. Morgan SE/ J.P. Morgan (Suisse) SA.
Please note that these marketing materials discuss trading over-the-counter (OTC) options. In any OTC transaction with JPMorgan, the client will hold counter-party risk. Additionally, the potential may exist for the transactions discussed in the presentation to be executed in the listed market. Several considerations should be taken into account including strategy, size of position, level of customization, term of transaction and cost. Please consult with your JPMorgan team for more information. Not all option strategies are suitable for investors; certain strategies may expose investors to significant potential losses. We have generally summarized the risks of selected derivative strategies. For additional risk information, please call your JPMorgan team for a copy of “Characteristics and Risks of Standardized Options” or visit: http://www.theocc.com/about/publications/character-risks.jsp. We advise investors to consult their tax advisors and legal counsel about the tax implications of these strategies. Please also refer to option risk disclosure documents.
Note: This information is intended to be a high level overview of potential hedging strategies that can be executed through OTC options to achieve specific goals. These strategies may not be suitable for all investors. This is not intended as an offer or solicitation for the purchase or sale of any financial instrument. In discussion of options and option strategies, results and risks are based solely on the hypothetical examples cited; actual results and risks will vary depending on specific circumstances. Investors are urged to consider carefully whether option or option-related products in general, are suitable to their needs. For a complete discussion of risks for any investment please review the Risk Disclosure Booklet, offering documents and speak with your investment specialists. Options are not capital protected. Capital at risk.
The material was prepared by an Associated Person with responsibilities for the marketing and sale of swaps and other derivatives. All questions related to swaps referenced in these materials must be directed to your J.P. Morgan representative.
RESEARCH CONFLICTS DISCLOSURE AND OTHER IMPORTANT DISCLOSURES
This message has been prepared by personnel in the Sales and Trading Departments of one or more affiliates of JPMorgan Chase & Co. and is not the product of JPMorgan’s Research Department. It is not a research report and not intended as such. This material is for the general information of our clients and is a “solicitation” only as that term is used within CFTC Rule 1.71 and 23.605 promulgated under the U.S. Commodity Exchange Act. The information contained herein is as of the date and time referenced above and J.P. Morgan does not undertake any obligation to update such information. This material does not purport to contain all of the information that an interested party may desire and provides only a limited view of a particular market. Transactions involving securities and financial instruments mentioned herein may not be suitable for all investors. Clients should contact their salespersons at, and execute transactions through, a J.P. Morgan entity qualified in their local jurisdiction unless governing law permits otherwise. J.P Morgan does not provide, confirm or otherwise opine on any tax-related queries, issues or outcomes related to securities or derivatives transactions to which yourselves and J.P. Morgan are counterparties. For tax-related advice or guidance related to transactions to which you and J.P. Morgan are counterparties, please consult your independent tax advisor.
RISKS OF INVESTING IN SWAPS
- Liquidity: Unwinds may be provided at JPMorgan discretion. However, the proceeds of an unwind may fall short of the expected payout at maturity given the same underlying value.
- Returns: The proceeds may depend on many variables including, but not limited to, the level and implied volatility of the underlying asset. The return may be positive, negative, or zero.
- Holding period: The derivative position may be held to maturity or closed out prior to maturity. Held to maturity or closed out prior to maturity, the net return to investors may be positive, negative or zero.
- Legal & tax: This material is distributed with the understanding that it is not rendering accounting, legal or tax advice. Consult your legal or tax advisor concerning such matters.
- Performance: Past performance is no guarantee of future results.
- Options related disclosures: If the information contained herein regards options related strategies, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation’s Characteristics and Risks of Standardized Options, please contact your J.P. Morgan Representative or visit the OCC’s website at https://www.theocc.com/company-information/documents-and-archives/publications
- Counterparty credit: All payments are subject to JPM counterparty credit
- Foreign Exchange: Holders of foreign securities can be subject to foreign exchange risk, exchange rate risk and currency risk, as exchange rates fluctuate between an investment’s foreign currency and the investment holder’s domestic currency. Conversely, it is possible to benefit from favorable foreign exchange fluctuations.
This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Products may not be suitable for all individual investors and are subject to investment risks. Typically, such investment ideas can only be offered to suitable investors through a confidential offering document which fully describes all terms, conditions and risks. Investors may get back less than they invested. Involves substantial risks, and potential investors should clearly understand the risks involved. Investing in structured products is not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment, which can include lack of liquidity in that there may be no secondary market and none expected to develop; restrictions on transferring interests in the investment; absence of information regarding valuations and pricing; and potentially higher fees than other investment strategies. Client does not receive dividends from the underlying security or securities. The investment should be considered a “hold until maturity” product and subject to issuer credit risk. Early unwinds could result in lower than expected returns relative to expected return at maturity and are subject to the sole discretion of the Issuer.
Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the original investment. The use of derivatives may not be successful, resulting in investment losses, and the cost of such strategies may reduce investment returns.
This material is for information purposes only, and may inform you of certain products and services offered by private banking businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.
