With the continuation of my last post some book rules for investments trying to reveal some of the structured products offered in the open economies of world amaze to see that more than 10 billions of structured products are sold every year :
- Reverse convertibles : They are unsecured short-term notes that are linked to the price of an underlying stock (typically not the stock of the issuer). The security comes with a high coupon rate (from 7 to as much as 25 percent). At maturity, the investor will receive the interest payment plus either 100 percent of his original investment amount or a predetermined number of shares of the underlying stock.
- An accumulator : This is one of the famous product in Asia. An accumulator is essentially a contract that obliges investors to purchase a security, currency or commodity at regular intervals at a fixed price. Continue reading “Structured Products Complexity & Greed”