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-CIMB?
Clients can have access to global markets that include some of the popular markets like the United States of America, Hong Kong and Singapore.
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
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.
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