You always wanted to invest in oil, gold, or other commodities or products? Investing in turbo’s offers the possibility for this. You can make a turbo for any kind of commodity or product in which you can trade. Currently there are about 1800 turbo’s to invest in. A turbo is an instrument, introduced by ABN Amro, with the quality of a future or option. This instrument makes profit when the direction of the underlying product is correct. Because of the leverage you benefit the profitable result on futures, options and also turbo’s, your return gets an acceleration because of the leverage this compared with the investing in the underlying value itself.

Example:

Suppose, you buy a house at € 400.000 and you have this house financed by a bank for 80%. You take also a mortgage of € 320.000. You have an on-value of € 80.000. After 5 years you want to sell your house. The house is, in the meantime, significantly increased in value, namely up to € 600.000. This means an appreciation of € 200.000, or a return of 50%. The

on-value is now € 600.000 - € 320.000 = € 280.000. The increase of the on-value is

€ 280.000 - € 80.000 = € 200.000, or an increase of 250%.
So, also does the turbo. Suppose you have a turbo long (a turbo you can speculate with on expected price increases) on index, for example AEX. A part of it is being financed by ABN Amro (as said, the turbo is a product of this bank). In the example of the house we saw that the appreciation is for the buyer and not for the bank. This principle also applies to the turbo. With the turbo long the appreciation is completely for the investor.

The pro's- and cons of turbo’s:
The Benefits of Turbo’s

The turbo is simple compared with options.With a small additional you can have a high return, thanks to the leverage.

- there is a large offer on turbo’s.
- the turbo can be used to respond to expected pricedevelopments.
- the turbo can be used to cover risks.
- investment in turbo’s have more advantage then investment in options.
- the biggest difference is that turbo does not know timevalue and option does know timevalue

Disadvantages:

Speeders

Following the turbo of ABN Amro, the Commerzbank introduced the Speeder. This product is practically identical to the turbo. The minimum leverage of a speeder is 2 and the maximum leverage is 200. A leverage of 200 means the speeder moves 200 times faster and more severe then the underlying value does. You can check it yourself what this is doing with your stoploss, which is being touched 200 times faster then with a movement of the ordinary underlying value.

We give you an example. On the website of the Citibank is a speeder long. The AEX is at 242,72. The stoploss level is 210 and the leverage is 6. Suppose the AEX increases by 10%, the speeder increases by 6 x 10% = 60%. If the rate of the AEX decreases by, for example, 5% the speeder decreases by 6 x 5% = 30%. If the AEX decreases to 210 points, the speeder will be removed from the stockmarket and the residual is calculated and paid. Suppose the AEX decreases to 208 points. The stoploss of 210 does its work and the speeder will be removed from the stockmarket and settled.

The investor now receives: (208 – 205,19)/10 = € 0,39

Druppels op glas

Limited Speeders

Limited speeders are speeders of which the financing level and the stoploss level are the same. These levels do not change, unlike the ordinary speeders. The limited speeders are being issued by Citibank. Also with limited speeders, you invest with a relatively small amount and with leverage.

Sprinters

In October 2008 the ING introduced the sprinter, as answer to the turbo and speeder. The product is practical identical to the turbo.

Trackers

Several years ago the Euronext introduced the indextracker. To tell the truth, the official name of the tracker is: Exchange Traded Fund, shortly ETF, but it is mostly called trackter. An indextracker is an investmentfund which follows an index promptly. There are many agreements with the turbo (speeder or sprinter).

Compass

Personal  note!

Perfect Indicator consider the turbo’s, speeders, sprinters, trackers etc. Financial products where you lose your money turbofast!. The fluctuations are much too flexible, there is being acted on an internal platform of the bank and so the bank can manipulate its own import and sales just fine. Besides the stoploss is, we believe, being affected too often and too fast.

In the knowledge (read tab psychology) that 90% of all the investors (research done at Alex Investment Bank in Holland (clients that do not use Perfect Indicator) more often choose the wrong direction instead of the right direction, you guess where all the money on this product is made. Certainly, it is like all of the Financial market a zero-sum game. Your personal loss on these products is purely profit for the banks.

The rate-changes are enlarged. The rate of the turbo, speeder, sprinter, tracker etc. is moving faster than the underlying value itself varies. How much faster? This can go up to 200 times faster.

Wij van Perfect Indicator vinden de Turbo’s, Speeders, Sprinters, Trackers etc financiële producten zijn waar je wel wat meer risico loopt. Ze zijn nog steeds goed met Perfect Indicator te traden. Echter, de koersschommelingen zijn wat flexibel, er wordt gehandeld op een intern platform van de bank en is dus door de bank prima met eigen in- & verkooptransacties te manipuleren. Daarnaast wordt de stop loss naar onze mening toch te vaak en te snel geraakt..