How to Invest in Certificates

You can buy and sell certificates via your traditional intermediary in the same way as you do with shares or trackers. They will then put your buy order through to NYSE Euronext's electronic order book.

Nonetheless before investing, it is a good idea to:

  • Read the issuing note.
  • Keep an an eye on the market and watch for any actions or events that might affect your intended underlying (capital events on stocks for example).

NYSE Euronext lists thousands of certificates, and it is important to select the right certificate on the underlying you have chosen. Certificates not only have different prices, their potential price development is also different as they all have different expiration dates, investment profiles, characteristics and strike prices. For a complete list of all the certificates listed on NYSE Euronext, please visit this page

You should never select a certificate purely on the basis of its absolute price. Although the absolute price of a certificate may be low, its relative price may be very high. You should therefore take into account the intrinsic value of the certificate, or the value which it would have if it were exercised immediately.

Two other useful indicators for selecting certificates are the delta and elasticity. These are values that reflect the situation at a particular moment in time and therefore allow you to compare certificates objectively. These values can be calculated for all certificates, and information about them can be found on the websites of most issuers.

Trading Certificates

About trading
Certificates are traded on NYSE Euronext's cash market in the same way as shares. They can be bought and sold throughout the day from 9.05 a.m. to 5.25 p.m. Certificates can be traded through your bank or broker, which will send your buy or sell order to the exchange. It is advisable to state a limit price for your order, so that you do not have to pay more or receive less than you intended.

Transaction fees differ depending on the intermediary involved. Your bank or broker can tell you which fees apply to you. There is often also a minimum trade size for certificates. If the minimum size is 1,000, it means you can buy and sell the certificates in batches of 1,000.

Price fluctuations and trading freezes
NYSE Euronext has specific trading rules certificates, which are intended to protect investors from sharp price movements. Trading in a certificate is frozen if a new order is entered in the order book and its execution results in a price movement that exceeds a certain threshold. The thresholds are maximum acceptable price movements and are stated in percentages. Following a trading freeze, NYSE Euronext will automatically resume trading in the certificate

Liquidity provider system
To ensure that investors are always able to buy and sell certificates at good prices, NYSE Euronext has concluded liquidity agreements with all the major issuers of certificates. According to these agreements, certificate issuers (or "liquidity providers") must comply with strict criteria regarding maximum spreads and minimum quantities throughout the trading day.

Under certain circumstances, such as system breakdowns or unusual market conditions, NYSE Euronext can release liquidity providers from their obligations. During that time, it may be difficult to trade in the affected certificates.

Last day of trading
The last day of trading in a certificate is not always the certificate's expiration date. In Brussels and Paris the last day of trading in certificates may be six days before the expiration date, while for certificates listed in Amsterdam and Portugal the last trading day may be four days before the expiration date. Investors should carefully check the contract specifications of your certificates.