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| Implied Volatility | The implied volatility of a share, index or any other asset price is the name given to the expectedvolatility that this share or index is anticipated as having over some future period.
This term derives from the pricing of financial options as it is the number used by option traders to calculate the price of any option when all the other factors involved are known. |
| In-the-money | This is the term used to describe any option which has a strike price that is far below (for a call option) or above (for a put option) the current level of the underlying. |
| Income Products | Income products are those that offer a potential income stream during the term of the product |
| Index/Indices | In financial markets, an index measures the performance of a portfolio of securities representing a particular market (for example, UK equities). Each Index has its own calculation methodology and is usually expressed in terms of a change from a base value. Most Indices used as Underlyings for structured products will be ‘price return’ Indices, meaning that they measure the performance of the constituent shares only. The performance of ‘total return’ indices will also include the effect of any dividends or corporate actions on the constituent shares. |
| Inflation Risk | Inflation is the general change in the prices of goods and services over time. If inflation is positive, this means that goods and services are generally becoming more expensive. Inflation risk arises because the repayment of capital and any return offered by most structured products will not be adjusted for any inflation experienced over the investment term. |
| Initial Capital | The amount of money an investor uses to purchase a Structured Product. |
| Intrinsic value | This is a term used when describing the premium of an option. The intrinsic value of an option is that element of the option’s premium that represents the value that the option would have were it to be exercised immediately |
| Initial Investment | The amount of money an investor uses to purchase a Structured Product. Please also see ‘Capital’ |
| Initial Level | The level of an Underlying that is used as the starting point for its performance (i.e. the performance of the Underlying is its Final Level in relation to its Initial Level). Please also see ‘Start Level’. |
| Intermediary Fees | How investors pay for financial advice has changed since the Retail Distribution Review. For structured products, advisers are no longer able to take commission for recommending a Structured Product to a client (please note that commission can still be charged for a Structured Deposit)
Instead, investors may pay a fee to their intermediary for the advice given (or the execution-only service, as appropriate). Most providers of structured products will facilitate the payment of Intermediary Fees on an investor’s behalf. In this case, an investor will pay one lump sum to the provider, and the provider will then pay the proportion of the amount that makes up the Intermediary Fee directly to the intermediary. |
| Investment Term | The lifespan of a Plan (from its Start Date to its End Date) |
| ISA | An ISA is a type of tax wrapper. Any returns received from an ISA are currently not subject to tax. There are two types of ISA: Cash ISA or Stocks and Shares ISA. Only one Cash ISA and one Stocks and Shares ISA can be subscribed to in each tax year, as long as the combined amount does not exceed the current annual ISA allowance of £15,000.
The tax treatment of investments will, amongst other things, depend on an individual’s circumstances. If in doubt, investors should consult with an appropriate professional adviser to ascertain for themselves the taxation consequences of acquiring, holding and/or disposing of any investments mentioned on this website. |
| ISA Regulations | The Individual Savings Account Regulations 1998, as amended or replaced from time to time |
| Issuer | The institution responsible for issuing a Structured Product |
| ISDA | ISDA stands for the International Swaps Dealers Association. ISDA is a trade body that represents participants in the wholesale over-the-counter (OTC) derivatives market. ISDA has been primarily involved in standardising the documentation used for OTC derivative products and the ISDA master agreement, and its associated documentation, has become the industry standard. |
| ISIN Code | International Securities Identification Numbers. The ISIN code is a 12-character alpha-numerical code that does not contain information characterising financial instruments but allows for uniform identification when trading or settling a security |