Discount-Entry Notes 101

Louis Gordon on 03 Mar 2024

Discount-entry Notes 101

As the stock market's valuations soar, investors find themselves at a crossroads, left with two prevailing thoughts: 

1. Hesitant, having missed the upside so far and therefore staying on the sidelines. 

2. Feeling the fear of missing out, compelled to buy at a premium and chase a growing trend. 

So, what is a Discount-Entry note?

For investors cautious about entering at today's prices, Discount Entry Growth strategies can provide a smart buffer with greater upside potential. A Discount-Entry Note is a type of investment strategy that is designed to provide exposure to an asset at a discounted entry level, from its current price. As an example, say a stock is trading at $1 today. A discount entry note with a 18% discount (or a 82% discount entry level), would allow investors to get that same $1 of exposure, for 82c - thus allowing for potentially greater upside, or protection, than buying the asset outright.

What are the benefits?

  1. Choice of Assets: Investors can choose the assets they would like exposure to, typically a single or basket of market-linked assets (i.e. stocks or ETFs).
  2. Optimising Market Entry: The strategy is designed to buy into the market at a 'discount-entry level' set by the investor, typically 5%-25% below current prices. 
  3. Downside Protection: Entering the market at a discount helps investors to outperform the reference assets in a bear market. 

What are the risks1?

  1. Market Risk: The product may at any time be subject to significant price movement which may in certain cases lead to significant losses, the investors entire capital is at risk.
  2. Liquidity Risk: The product has a materially relevant liquidity risk. Certain exceptional market circumstances may also have a negative effect on the liquidity of the product.
  3. Credit Risk: Investors take a credit risk on the Issuer. Thus, the issuer insolvency may result in the partial or total loss of the invested amount. 

Have an idea? Let us know here.

If this concept interests you, click on this link to talk to someone from the team and see what we can price for you.

How can I find out more? 

Should you have any questions or to speak to us about how we can help please contact us at


This education series provides general information only and is not intended to provide financial advice.

Important Notes

  1. The above summary is not a definitive list of risks - please refer to term sheet for a full description of risks: In addition to the below risks, various factors may impact on the potential return of the product. Some of these risks are Credit risk, Recourse limited to the Guarantor and ADI status, Market Risk, Liquidity Risk, Events affecting the underlying instrument(s) or hedging transactions, Secondary Market Risk, Currency Exchange Risk, Settlement risk, Conflicts of Interest, Risk relating to unfavourable market conditions, Distributor’s Undertaking, and Information when products do not offer full principal repayment at maturity] and have been identified from the Issuer. For further information please refer to the term sheet provided alongside this presentation or on the Stropro platform.

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