If you hold a Bull certificate and the price of the underlying asset drops sharply, there is a predefined barrier level. If this barrier is reached or breached, the certificate is knocked out—it immediately stops trading and expires. The residual value is zero, meaning you lose your entire investment, but never more than your invested amount.

If you wish to maintain exposure to the same asset, a new Bull certificate will be available for trading.

The opposite applies to Bear certificates: If the price of the underlying asset instead rises sharply, the barrier is breached and the Bear certificate is knocked out—with the same effect as for Bull certificates in a falling market.

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Yes, with a leverage of -1. An important difference is that Valour Short Bitcoin tracks spot Bitcoin and not an underlying index of futures. 

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The products track VALOUR-KAIKO CDF BTCUSD and VALOUR-KAIKO CDF ETHUSD, indices based on two different futures for each underlying asset. You can read more about the futures index here: https://www.kaiko.com/indices-resources

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No, it cannot be eliminated. However, it’s important to understand that these products are best suited for short-term strategies, not long-term investments.

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Contango: Futures prices are higher than the spot price. This typically has a negative effect on Bull products.

Backwardation: Futures prices are lower than the spot price. This typically has a positive effect on Bull products.

For Bear products, the effect is the opposite.

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Some leveraged products are based on futures contracts, which have an expiry date (however, Valour ETPs do not have an expiration date). When a contract nears expiry, the position must be rolled — meaning the old contract is sold and replaced with a new one with a later maturity date.

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If the market moves consistently in your favor (e.g., up for Bull, down for Bear), daily rebalancing can enhance returns.

If the market moves against your position, losses may be amplified.

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In a sideways market (no clear direction), daily leverage can cause the product’s value to erode over time, even if the underlying asset remains flat. This is known as the compounding effect or decay.

The product is rebalanced every night to maintain its targeted leverage level (e.g., x2 or x3). This means the exposure is adjusted daily, which significantly affects long-term performance.

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A Bull or Bear certificate is a leveraged investment product with a constant daily leverage, designed to deliver a set multiple of the underlying asset’s daily performance (e.g., Bitcoin).

Bull = you expect the price to rise
Bear = you expect the price to fall

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