The Application Of Option In Structured Products

With the full opening of China’s financial industry, the rapid advance of the interest rate liberalization, coupled with the launch of exchange- traded options and other derivative products, China’s financial market has entered a period of rapid growth, the investment needs of investors are also increasingly diversified, traditional solid income financial products such as fixed deposits have been difficult to attract investors, so all kinds of innovative financial products have emerged. structured products is a major innovation of the global financial markets for nearly 20 years, and its innovative design make it mysterious and attractive, which has gradually become the mainstream investment tool.Structured products are a combination of fixed-income securities and derivatives, financial engineering staff using fixed income securities to guarantee the relative safety of principal, using derivatives’(options) characteristics such as highly leveraged, nonlinear returns to realize the excess returns, it is a "tailored" investment products according to investors different risk-return needs. So whether researchers or investors must have a full understanding of structured products, this paper comprehensively expounds the definition, classification, function of structured product and the current status of the development of structured products, and detailed analysis the pricing principles of structured products, introducing the most commonly used pricing model, and using a combination of theory and case analysis method to analyze the structured products of ICBC. The innovation of this paper is trying to use Monte Carlo pricing model pricing ICBC’s interval hook type of structured financial products, analyzing pricing and the actual income of this kind of complex product. Finally the paper summarizes some deficiencies and innovation of this article, and puts forward some Suggestion for the future research direction of the structured products.