Bonus certificate

Bonus certificates have a risk buffer for price losses in the underlying; the bonus guarantees a minimum return above the risk level.

A bonus certificate represents an alternative to a direct investment in a share or an index. Investors primarily use them if they believe that despite rising prices setbacks are still likely to occur.

A bonus certificate is furnished with a bonus amount and an upper and lower price level. If the certificate expires with the price of the underlying ranging between these two levels, owners are paid out their bonuses. If the underlying was at or below the risk level during the certificate's lifetime, its price is that of the current value of the certificate at expiry. If the underlying is above the upper level at expiry, the investor fully participates in the price gains. Some bonus certificates have a profit cap. This is where the certificate stops participating in the price gains of the underlying. 

A bonus certificate is issued at the current price of the underlying. The upper level is derived from adding the bonus to the issue price. The lower level is determined at issuance and usually expressed in percent.

Our glossary explains important financial terms and should not leave any questions unanswered. However, if you are missing a definition, please write to us at We will then include the term if possible.