Long-term equity anticipation securities

Long-term Equity Anticipation Securities (LEAPS)

Long-term Equity Anticipation Securities (LEAPS)

Long-term equity anticipation securities (LEAPS) are option contracts that have a much longer expiry period than standard options. The expiry period typically ranges from 1-3 years. They are derivatives that track the price of an underlying asset like stocks or indexes. The Chicago Board Options Exchange (CBOE) was the first to introduce LEAPS in 1990. The buyer in a LEAPS contract has the right but not the obligation to purchase or sell the underlying asset at a predetermined rate on or before its expiration date. (more…)
DuPont Analysis

DuPont Analysis

DuPont Analysis

The DuPont analysis (otherwise called DuPont character or DuPont model) is a system for breaking down essential performance promoted by DuPont Corporation. DuPont analysis is a helpful procedure used to break down the various drivers of return of equity (ROE). The decomposition of ROE allows investors to focus on the vital metrics of monetary execution exclusively to recognize strengths and weaknesses. (more…)
Equity-Linked Note

Equity-Linked Note

Equity-Linked Note

What is Equity-Linked Note (ELN)? An Equity-linked Note is a structured debt instrument. It refers to an investment instrument that provides return linked to the performance of underlying equity instead of the fixed interest rate. The equity tied to an equity-linked note can be a single security, group of securities, or a broader market index. It differs from other debt instruments which provide fixed interest on fix schedule to the investors. (more…)
Hybrid Securities

Hybrid Securities

Hybrid Securities

What are Hybrid Securities? Hybrid securities are a group of tradable investment instruments which combine the features of two or more type of securities, usually both equity and debt. These securities tend to give higher returns than the fixed income securities such as bonds, but lower returns than the variable income securities such as stocks. The security will have the assured payment feature of the bond, while at the same time it will have the opportunity for capital appreciation of the stock. (more…)
DEBT SECURITIES VS EQUITY SECURITIES

Debt Securities vs Equity Securities

Debt Securities vs Equity Securities

Debt securities are financial assets that define the terms of a loan between an issuer (the borrower) and an investor (the lender). Equity securities are financial assets that appear to be the shares of a corporation. (more…)