Unravelling the structured product jargon

Q. Can you explain the term averaging? A. Averaging, when applied to structured products, is basically a period of time by which the index, for example the FTSE 100, is measured either at the beginning or at the end or both at the beginning and the end to give you your overall return at maturity. Q. Could you give me a practical example of how that might work? A. Take as an example a product that says it will pay you 100% of the FTSE at maturity in five years’ time. Clearly you could have a situation where you take your five year product out and in four and a half years’ time e...