LEVERAGED PRODUCTS
Equity Linked Notes
An equity-linked note (ELN) is designed for investors with a bullish outlook. It gives clients the opportunity to buy shares of a selected company at a discount to market price or enjoy higher returns than a direct investment in the underlying stock in the event that the stock price trades sideways.
Reverse equity-linked notes (RELNs) as the name suggests, is designed for clients with a stable or moderately bearish market outlook. It allows clients to utilise existing shares for potentially higher returns by giving them the opportunity to sell their existing shares at a pre-agreed price in the event the market turns bullish or unlock more returns from the stock, especially during periods where the stock does not give dividends.
Why trade this product with CGS International?
01 Market Access Clients can have access to global markets that include some of the popular markets like the United States of America, Hong Kong and Singapore. |
02 Leverage ELN, as a yield enhancement product, offers clients a higher interest income compared to the traditional fixed deposit. Therefore, it provides an avenue for clients to potentially maximise their returns. |
01
Market Access
Clients can have access to global markets that include some of the popular markets like the United States of America, Hong Kong and Singapore.
02
Leverage
ELN, as a yield enhancement product, offers clients a higher interest income compared to the traditional fixed deposit. Therefore, it provides an avenue for clients to potentially maximise their returns.
Available offerings for Equity Linked Notes
Client sells a put option, which can enhance the yield of the deposit if the underlying equity price closes at or above the strike price on the valuation date. Click here for illustration.
Client sells a call option, which can enhance the yield of the deposit if the underlying equity price closes at or below the strike price on the valuation date. Click here for illustration.
Client sells both a call and put option at different strike prices, which can enhance the yield of the deposit if the underlying equity price closes at or above the lower strike. Simply put, it is a combination of both a Bull and a Bear ELN, of which clients can structure to meet their needs.
Support
Over-The-Counter (OTC)
Clients can trade ELN OTC at our CGS International Securities offices or contact our Trading Representatives to place a trade.
Learn More
FAQs
It differs from market to market but typically starts from about USD 200,000.
Only for Accredited Investors.
No, because buying the most common “Bull” ELN is like selling a put option. The maximum loss an ELN investor may suffer is when the stock price drops to zero. The risk involved is the same as buying common stock, and the loss is not unlimited. On the flip side, “Bear” ELNs has an unlimited risk as the stock can go to infinity.
Open an account now
Simply contact CGS International Securities to request for an account opening pack.
1800 538 9889 / (65) 62108453
clientservices.sg@cgsi.com
Download our registration form and mail it to the desired branch with all the enclosures.
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Key Risks
The key risks associated with ELN include the following. It is important to note that the list of risks is not exhaustive.
ELNs is a product which derives its value from the underlying equity. The yield enhancement for the investor in ELNs comes from the premium received from underwriting risk associated with the price movement of the underlying. An adverse price movement of the underlying can cause investors to lose more than the principle amount invested.
A default of the issuer of ELNs can cause the full loss of the principle amount invested. Eg. If the issuer goes bankrupt, the investor loses his initial capital.