Globally Floored Contract

DEFINITION of 'Globally Floored Contract '

A guarantee found in structured investment products that provides a minimum payoff at maturity. A globally floored contract will protect the investor or minimize his loss in case the underlying investment loses its value.

BREAKING DOWN 'Globally Floored Contract '

With principal-protected notes, an investor receives a guarantee providing downside protection on the investment. A cost of this downside protection is that the investor will not participate in the full upside potential of the underlying investment.

RELATED TERMS
  1. Interest Rate Floor

    An over-the-counter investment instrument that protects the floor ...
  2. Locally-Capped Contract

    A type of embedded option found in structured investment products, ...
  3. Principal-Protected Note - PPN

    A fixed-income security that guarantees a minimum return equal ...
  4. Guaranteed Investment Fund - GIF

    A type of investment product offered by insurance companies that ...
  5. Trading Floor

    The floor where trading activities are conducted. Trading floors ...
  6. Structured Note

    A debt obligation that also contains an embedded derivative component ...
Related Articles
  1. Financial Advisor

    Principal-Protected Notes: Why Use Them?

    Principal-protected notes are complicated and aren't for amateurs, but they can turn out some upside if used correctly.
  2. Markets

    How To Create Capital Protected Investment Using Options? (MSFT)

    Does "Capital-Protection" guarantee in an investment product sound attractive? Wait! Here's how you can create a better one for yourself, at low-cost!
  3. Financial Advisor

    Structured Notes: What You Need to Know

    Structured notes are complex, high risk and might not be suitable for individual investors. Here's why.
  4. ETFs & Mutual Funds

    An Introduction To Structured Products

    Learn a simple way to bring the benefits of derivatives into your portfolio.
  5. ETFs & Mutual Funds

    An Introduction To Structured Products

    Structured products take a traditional security and replace its usual payment features with a non-traditional payoff.
  6. Trading

    Principal-Protected Investments: Risks, Fees And Regulations

    Discover if these instruments hit the right note for you.
  7. Financial Advisor

    4 Structured Product Types Wealthy Clients Love

    High-net-worth investors find structured products appealing for a variety of reasons. Here's a look at four types.
  8. Retirement

    Build Your Own Annuity

    Here are some tips on the different types of annuities to have in your portfolio.
  9. Trading

    Contract for Difference (CFD) Risks

    Contracts for differences are flexible, highly leverageable trading instruments. They offer potentially outsized returns accompanied by noteworthy risks.
  10. Financial Advisor

    When Does It Make Sense to Buy an Annuity?

    Annuities are not always appropriate for every situation. Here is when it makes sense to purchase them.
RELATED FAQS
  1. How does a company obtain a bank guarantee?

    Find out how bank guarantees work, why they are issued and the process that a business normally goes through to acquire one ... Read Answer >>
  2. How do the investment risks differ between options and futures?

    Learn what differences exist between futures and options contracts and how each can be used to hedge against investment risk ... Read Answer >>
  3. What is the difference between diversification and hedging?

    Learn what diversification and a hedge are, how investors can diversify and hedge their investments, and the main difference ... Read Answer >>
  4. Why are traders on the floor of the exchange?

    Before the advent of electronic trading platforms, the floor of the stock exchange was the location for market transactions ... Read Answer >>
  5. What investments have been the poorest historical performers?

    Learn about low performance investments and how they are used by investors. Find out which investments lose funds and how ... Read Answer >>
  6. What does it signify if the term structure of an interest rate's curve is positive?

    Understand what the term structure of interest rates is used to measure. Learn what a positive term structure signifies to ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center