TARF

Target Accrual Redemption Forward; Target Profit Forward

The Target Forward is the most basic of the "Target" family of forwards, aimed at providing the client with better-than-market outright hedging rates.

The client will be able to sell EURUSD on a monthly basis at a very attractive strike rate until the Knock-Out Event is triggered.

The Knock-Out Event is triggered when the accumulated Monthly ITM Intrinsic Value is equal to or greater than the Knock-Out Amount.

Payoff Diagram:

Payoff at Expiry:

At expiry if EURUSD fixes:

• Above the Strike, the client is fully protected at the Strike on 100% of the Notional subject to the target condition. Once the target is reached the strategy is cancelled and the client will become unhedged.

• Below the Strike, the client will find itself obligated to trade at the Strike level on 200% of the Notional.