Structured Product

Structured product - A structured product is a securities and derivatives portfolio that a company may put together, or an investor can customize their own portfolio. However customizing a portfolio would also mean that the investor is willing to take on the risk involved since there is no standards adherents within the products chosen. Products will vary and so will the features and components of each product. This in turn varies the payouts and creates a high-risk environment. The payouts in a structured product are nontraditional; they do not include the usual such as an investment grade bond but will have nontraditional features such as the performance of an underlying security without using the company's cash flow. The structured product resembles options pricing, and can have some features of swaps, forwards and futures, leveraged upside participation or downside buffers.