Structured products generally combine derivatives such as options with more traditional assets such as stocks or bonds, either to reduce or eliminate the risk associated with certain financial instruments or to improve investment returns.
A structured product often consists of a ‘low-risk and return’ component, e.g. a bond product, and a ‘higher-risk and return’ component (a derivative, a share, an index, currencies or commodities) to improve performance.
The price of a structured product is defined by the value of its underlying assets.