What does the liquidation indicator on the wikifolio details page indicate and how is it calculated?
The liquidation indicator was designed to make wikifolio certificates more comparable in terms of the liquidity of the securities contained in the wikifolio.
Calculation of the liquidation indicator
For each individual value in the wikifolio, the size of the actual risk position is calculated from the associated wikifolio certificate. The weighting in the current portfolio and the capital invested in the wikifolio certificate are the decisive factors.
The position size is set in relation to the average daily actual trading volume of the last 90 days of the individual securities contained in the wikifolio. This ratio shows how many days would theoretically be required to completely sell the respective position.
The weighted average of all positions is calculated for the determination of the liquidation indicator. The value is updated every five minutes.
The following must be kept in mind
The liquidation indicator offers the possibility to compare wikifolios with regard to their liquidation risks. It is a value calculated on the basis of theoretical assumptions. It is thus possible that actual liquidation may occur faster or take longer. It also does not give any indication as to what price losses may be suffered in the certificate as a result of the liquidation. As a weighted average across all positions of the wikifolio, the value is intended to give an impression of the risk that can arise as a result of not so liquid parts and large positions.
Important: The liquidation indicator is for guidance only and must be understood as an indication of the risks that may arise due to a lack of liquidity of the securities in the current portfolio. Other risks such as, for example, the price volatility risk of a certificate are not included in the figure.
This is what is behind the liquidity of wikifolio certificates
The issuer of wikifolio certificates, the Lang & Schwarz Aktiengesellschaft, wants to hedge the risk positions from wikifolio certificates as much as possible. Of course, the issuer can only hedge or liquidate hedges to the extent that the respective liquidity of the underlying securities permits.