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27 percent protection: Lufthansa with a 21 percent probability

27 percent protection
Lufthansa with a probability of 21%.

In recent weeks, Lufthansa stock has risen from lows in March 2022. With bonus certificates with a cap, investors can achieve high returns even if the stock falls to these lows.

Deutsche Lufthansa released consistently positive first quarter data last week. Passenger volume in the first quarter of 2022 was 171% higher than in the first quarter of the previous year, reaching 57% of the pre-crisis level in 2019. The number of flights increased by 242% over the year previous.

Lufthansa
Lufthansa 6.90

Although restrictions are easing around the world, the price of oil and the uncertain impact of the war in Ukraine are now causing sector volatility. Without prejudice to the development of the war in Ukraine, the company assumes that the capacity of passenger airlines will again reach more than 70% of the pre-crisis level in the financial year 2022.

The investment idea

Anyone considering an investment in Lufthansa shares in the current attractive stock market situation could consider purchasing a bonus certificate with cap as an alternative to purchasing shares. Bonus certificates significantly reduce the risk of buying stocks directly and still allow for returns in the double-digit percentage range.

In addition to dividend payments, the direct purchase of the Lufthansa share will only result in a positive return if the share price rises. With bonus certificates with and without caps, investors can achieve disproportionately high returns not only when the share price rises, but also when prices are stagnant or falling.

The way it works

If the Lufthansa share does not touch or falls below the € 5.00 barrier by the certificate valuation date, the bonus certificate with cap will be redeemed on 23 June 2023 with the maximum redemption amount of € 7.25 .

The key data

The HVB bonus certificate with cap (ISIN: DE000HB6BS25) on the Lufthansa stock has a bonus level and a cap of 7.25 EUR. The limit defines the maximum payment amount for the certificate. The barrier activated by the valuation date, June 16, 2023, is Euro 5.00. At the Lufthansa share price of EUR 6.83, investors were able to purchase the certificate for EUR 5.97. The certificate is therefore considerably cheaper than the fee.

The possibility

Since the certificate can currently be purchased for 5.97 EUR, it allows for a gross return of 21.44 percent (= 19 percent annually) until June 2023 if the share price has never dropped by 26.79 percent at 5 or 5 EUR by the valuation date falls below.

The risks

If the Lufthansa share price reaches the EUR 5.00 barrier by the valuation date and the stock is listed below the cap on the valuation date, investors will receive a Lufthansa share for each certificate in their deposit. If this share is sold below EUR 5.97, the purchase price of the certificate, the investment will result in a loss of capital.

This article does not constitute a recommendation to buy or sell Lufthansa shares or Lufthansa share-based investment products. No liability is accepted for the accuracy of the data.

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