## How Do Shark Fin Structured Products Work?

Shark Fin is an innovative investment instrument that combines features of fixed-income products with financial derivatives. Its name evokes the shape of a shark fin emerging from the water, reflecting the characteristic yield curve of this product. It is an ideal option for conservative investors seeking stable income while maintaining low exposure to volatility risk.

The core mechanism of Shark Fin operates through a predefined price range. During the subscription period, if the asset price remains within this specified range, the investor earns increased returns. If the price moves outside the range — known as a knock-out — the investor only receives the guaranteed annual return (APR).

## Capital Protection and Variable Returns

One of the most attractive features of this product is capital guarantee. Regardless of market fluctuations, investors recover their initial investment plus a guaranteed APR. This provides a safety cushion for those with low risk tolerance.

Returns are calculated progressively within the permitted range. The closer the liquidation price is to the upper limit of the range, the higher the returns. Conversely, if the price approaches the lower limit, returns decrease but remain above the guaranteed APR.

## Practical Example of Return Calculation

Consider a product with the following characteristics:
- **Guaranteed APR:** 6%
- **APR Range:** 6.04% to 30%
- **BTC/USDT Price Range:** $99,200 - $104,700
- **Invested Amount:** 10,000 USDT
- **Period:** 7 days

**Favorable Scenario:** If the BTC/USDT liquidation price stays within the range throughout the period and closes at $103,000, the APR would be calculated as:

6.04% + (103,000 - 99,200) ÷ (104,700 - 99,200) × (30% - 6.04%) = 22.60%

Final returns would be: 10,000 × 22.60% × 7 ÷ 365 = **43.34 USDT**

**Knock-out Scenario:** If the BTC/USDT price moves outside the specified range at any point, the return is limited to the guaranteed APR of 6%. Final returns would be: 10,000 × 6% × 7 ÷ 365 = **11.51 USDT**

## Advantages and Considerations

Structured products like Shark Fin offer clear advantages for markets with controlled volatility. When prices remain stable within the specified range, they generate returns significantly higher than traditional fixed-income products.

Subscription is straightforward: it only requires estimating the probable price range and selecting the corresponding product. The system automatically manages settlement at maturity without manual intervention from the investor.

However, it is essential to understand that these products have locking features: early redemption is not allowed until the end of the subscription period. The "capital guarantee" refers to the invested amount in the specified cryptocurrency, without protection against devaluation of that digital currency relative to fiat currencies.

## Risk Considerations

The maximum return of Shark Fin is achieved in stable markets where the price remains within the predefined range. If the market experiences extreme volatility and the price moves outside the range, investors only recover the guaranteed APR, which can be significantly lower than potential maximum returns.

The APR range can be adjusted according to market conditions but is set before the start of the interest period. Investors should carefully evaluate their predictions about price movements and consider whether their expectations align with the product parameters.

This structure is more suitable for investors anticipating a sideways or limited-movement market, rather than pronounced bullish or bearish trends.