What are CBBC?

What is a CBBC?

CBBCs (Callable Bull/Bear Contracts) are leveraged structured investment products. Investors can track the price fluctuations of underlying assets with a small principal, without paying the full cost of the assets. They are traded on the cash market of the Hong Kong Exchanges and Clearing Limited (HKEX) and settled in cash upon maturity.

What are the types of CBBCs?

1. By investment direction: Divided into Bull Contracts (bullish on the underlying asset) and Bear Contracts (bearish on the underlying asset);

2. By residual value: Divided into Category N (no residual value upon call) and Category R (possible residual value upon call). Currently, all CBBCs listed in the Hong Kong market are Category R.

What are the core features of CBBCs?

① Leverage: Participate in asset fluctuations with a small principal, and both risks and potential returns are amplified;

② Mandatory call mechanism: A call price is set at issuance. If the price of the underlying asset touches the call price, the CBBC will immediately terminate trading and expire early;

③ Fixed maturity date: The tenor is usually 3 months to 5 years. CBBCs are issued by licensed investment banks.