Call and Settlement Time for HK CBBCs

From the listing date until the day before expiry, if the underlying asset's price reaches the call price on any trading day, a mandatory call event will occur, causing the CBBC to cease trading immediately.

When the call price is reached:

Bull Contract Settlement

Example

Scenario 1: Call not triggered

Investors would receive:
= (Settlement price of underlying asset - Strike price of bull contract) / Entitlement ratio
=（$132–$125）/ 100
= $0.07

Scenario 2: Call triggered

Investors would receive:
= (Lowest price of underlying asset - Strike price of bull contract) / Entitlement ratio
=（$126–$125）/ 100
= $0.01

*Generally, the settlement price of CBBCs corresponds to the closing price of the underlying asset on the last trading day before expiry. For index-based CBBCs, the settlement price is based on the settlement level of the futures index for the expiry month. Investors should refer to the listing documents for specific settlement details.

^#The lowest price refers to the lowest spot price of the underlying asset from the time of the mandatory call event to the end of the next trading session. The calculation will extend to the afternoon session if it is called in the morning, and to the following trading day's noon session if it is called in the afternoon. In a worst-case scenario, if the lowest price equals or falls below the strike price of the bull contract, the investor will receive no residual value.

Bear Contract (Category R)

Example

Scenario 1: Call not triggered

Investors would receive:
= (Strike price of bear contract - Settlement price of underlying asset) / Entitlement ratio
=（$135–$128）/ 100
= $0.07

Scenario 2: Call triggered

Investors would receive:
= (Strike price of bear contract - Highest price of underlying asset) / Entitlement ratio
=（$135–$131）/ 100
= $0.04

*Generally, the settlement price of CBBCs corresponds to the closing price of the underlying asset on the last trading day before expiry. For index-based CBBCs, the settlement price is based on the settlement level of the futures index for the expiry month.

The highest price refers to the highest spot price of the underlying asset from the time of the mandatory call event to the end of the next trading session. The calculation will extend to the afternoon session if it is called in the morning, and to the following trading day's noon session if it is called in the afternoon. In a worst-case scenario, if the highest price equals or exceeds the strike price of the bear contract, the investor will receive no residual value.

How to Settle Residual Value of CBBCs After Expiry or Call Event

No further action is required by the investor once a CBBC reaches expiry or is called. It is recommended that you check your daily statement for details.

If there is any residual value, Longbridge will automatically credit the amount to your account within one week following settlement by the issuer. The corresponding CBBC will be removed from your holdings within the same timeframe. Please refer to the issuer's official announcements for further information. You can also check the residual value of CBBCs via the following link: https://warrants.ubs.com/en/cbbc/residual-value-of-cbbc