First of all, no matter what kind of investor, all need to meet the investor appropriateness management regulations, through different purchase channels, investor appropriateness management regulations are different.

Secondly, investors who buy snowball products essentially express the expectation that the price of the linked object will continue to fluctuate or rise slightly, but it is more difficult to have a significant continuous decline. If you don't accept this expectation, then Snowball product is not for you.

Finally, Snowball product is a kind of high-yield and high-risk financial product, which requires investors to have the corresponding risk tolerance, fully understand the risk-return characteristics of the product before purchase, and make appropriate investment choices.

1. The downside risk of the linked target: this is the biggest risk investors need to face. If the price of the linked target falls by a large margin, triggering the tapping time, and there is no subsequent rise and tapping out, and the ending price of the linked target is lower than the beginning price, investors need to bear the loss.

2. Liquidity risk: Snowball products are financial products without active redemption terms, no matter what the reason, it is not possible to actively redeem and exit halfway, and it is necessary to strictly follow the terms of Snowball products to hold maturity or knock out termination, and investors need to make financial arrangements in advance.

3, reinvestment risk: the product is quickly knocked out, investors can not get enough investment income, will face the risk of reinvestment.

Taking common non-capital protection snowball products as an example, in extreme cases, if the price of the underlying object falls to 0, investors will face the maximum loss, that is, the loss of all the investment principal. If a sharp fall in the market triggers a knock-in event, then the final loss of the snowball product is similar to the direct purchase of the target itself, that is, the risk of the snowball product with the index or stock as the target is wiped out and the risk of investors directly buying index funds or stocks falling to zero is basically similar.

No, although in most cases, snowball products can obtain a fixed coupon income, but in extreme cases, it may still have a loss, on the surface and solid income products have a certain similarity, but snow ball financial products are embedded derivatives structured products, and the underlying logic and structure of solid income products is completely different. Therefore, snowball products are by no means class fixed income products, will not earn a steady income, investors should pay special attention to.

No, for investors, whether they can get income depends on the judgment of the price trend of the underlying object, if there is no sharp fall, there is no trigger knock in event, investors can get coupon income. If there is an extreme fall in the underlying, investors will suffer losses, so it is particularly important for investors to judge whether the underlying will suffer an extreme fall.

For brokerages, the hedging transaction of high selling and low absorption is the main source of income for the snowball business process. This requires brokerages to judge the volatility of the underlying target. If the actual volatility is higher than the implied volatility priced at the time of issuance of the snowball product, brokerages will make money; otherwise, they will lose money. For brokerages, judging the volatility of the underlying is the key to profit and loss, rather than the underlying price trend.

On the one hand, it depends on the income sources of securities companies issuing snowball products. The income sources of securities companies are mainly divided into three parts.

The first part is to earn hedging income from high selling and low absorption of the linked target, which tests the investment ability of the brokerage and is also the main source of income.

At present, most snowball products are linked to the CSI 500 index, and the CSI 500 index futures are discounted for a long time. Brokers can earn the discount income when they use the CSI 500 index futures to hedge.

The third part is the income of idle funds to buy other fixed income products, because the hedging transactions of Snowball products are not always full, idle funds can earn part of the investment income.