# Option percentage quotation for structured products

I am having some trouble to understand how option premium can be a percentage for structured products. For example, in an Equity Linked Note, let's say the bond part cost 80% of notional we have 20% to be allocated in the option part. What percentage does it corresponds to ? How many options are needed?

Thank you

• Typically you start with an investment amount, say 100000 EUR. You compute how many options you need based on the payoff you would like to have. Then you look at the market price of that option and with that you compute how much those options cost. Dividing by your planned total investment gives you the percentage of option premium. (The balance will be put in a risk free asset). You try again with different strikes, maturities, etc. until you have a product you are happy with. – noob2 Sep 30 '20 at 6:27
• Ok so if I understand correctly the number of options is basically the notional/strike, isn't it ? – Pierre_G Sep 30 '20 at 15:30