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. Principal-Protected Note - PPN

    A fixed-income security that guarantees a minimum return equal ...
  3. Locally-Capped Contract

    A type of embedded option found in structured investment products, ...
  4. Trading Floor

    The floor where trading activities are conducted. Trading floors ...
  5. Guaranteed Investment Fund - GIF

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

    The lowest acceptable limit as restricted by controlling parties. ...
Related Articles
  1. Bonds & Fixed Income

    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. Investing Basics

    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. Professionals

    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. Options & Futures

    An Introduction To Structured Products

    Learn a simple way to bring the benefits of derivatives into your portfolio.
  5. Investing Basics

    An Introduction To Structured Products

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

    Principal-Protected Investments: Risks, Fees And Regulations

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

    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

    Introduction To Annuities: Variable Annuities

    In the last section, we examined indexed annuities and their components. In this section, we will examine the third major category of annuities. Traditionally, variable annuity investors have ...
  9. Professionals

    Equity Forward Contracts

    CFA Level 1 - Equity Forward Contracts. Learn how equity forwards can guarantee a market price for a stock or portfolio. Provides examples showcasing this transaction.
  10. Retirement

    Build Your Own Annuity

    Here are some tips on the different types of annuities to have in your portfolio.
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. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center