Research On The Pricing Of Bank-triggered Structured Wealth Management Products

Structural financial products belong to a financial innovation product and it usually be considered as a combination of zero interest bonds and derivatives.At the same time,structured products play an intermediary role between income and risk,and provide new investment direction for investors who are in the era of meager profit and suffer from stock market turbulence.Therefore,how to design a reasonable product structure to ensure the income of investment and to standardize the pricing of products have become the focus of attention.With the development of the domestic stock market,the ratio of the trigger structured products with stock or stock index as the target is increasing in the financial product market.Therefore,the focus of this study is on the trigger structured financial products’ pricing.It is hoped that the pricing ideas of this type of product can be clearly defined and provide suggestions for investors to make investment decisions through the analysis of its design and pricing.In view of this,this paper selects a product called "easy profit 36",which is a 3 years structured financial products of Bank of East Asia issued in 2016,to research its pricing problem as the research content and to analysis implementation process of pricing principles.The research will contribute to the nonprofessional investors on the demand of analyzing the value of trigger structured financial products.Trigger structured financial products can be seen as a combination of ordinary bonds and options linked to underlying stocks.Fixed bond reflects the fixed income of financial products,and options reflect the profitability of financial products.This research will be carried out in the following aspects.First of all,combing the relevant background of writing and the framework of the article,and a brief description of the research situation at home and abroad of this field.Then we introduce the concept of stock linked financial products,describe the elements of China’s current stock linked financial products,and classify China’s large number of stock linked financial products according to different perspectives,lastly derive the pricing formula of trigger structured financial products.Finally,selecting “easy profit 36 "trigger structure financial product for pricing analysis.At first,it is the introduction and analysis of the basic situation of this product,and then decomposing the product to illustrate the option properties of the product.Then the "easy profit 36" financial products is divided into two parts of fixed income products and financial derivatives.The part of fixed income product is priced by discounted cash flow method,and the part of option pricing uses the Monte-Carlo simulation method.We get the conclusion that the theory price is higher than the actual price after applied the pricing method,the financial product is issued at a discount,and its expected revenue is 7.41%,at the end of this paper,an analysis of "easy profit 36" financial products risk value is done combined with the risk factors.At the end of the article,we summarize some problems existing in the market of financial products in China,and put forward some suggestions and suggestions for improvement.The inadequacies of the article are also explained at the end.