primer
07-07-2008, 04:18 AM
I'm warming up to structured products and have been reading up on what they are and how they function. I think I understand the basic concept of structured securities, where you have a note and an underlying derivative. I just had two questions that you all may be able to answer for me.
1. I've read through the investopedia page (http://www.investopedia.com/articles/optioninvestor/07/structured_products.asp) that describes structured products & principle protection but I don't think I understand how the institution issuing the structured product makes money. Is it just a standard performance-based system, where the bank or institution collects a percentage of the gains on the underlying derivative?
2. Do you any of you, particularly those who might work on Wall St. or at a financial institution, have experience trading or working with structured products? It's an asset class (if it can be called that?) that really interests me and I'd be curious to get some insight on the work involved trading/issuing these structured securities (especially in contrast to traditional equities).
With the advent of these structured products (they're relatively new right?) I've seen some predictions that the demand for traders that have experience with these investment vehicles will likely continue to grow. Thanks in advance for any insight!
1. I've read through the investopedia page (http://www.investopedia.com/articles/optioninvestor/07/structured_products.asp) that describes structured products & principle protection but I don't think I understand how the institution issuing the structured product makes money. Is it just a standard performance-based system, where the bank or institution collects a percentage of the gains on the underlying derivative?
2. Do you any of you, particularly those who might work on Wall St. or at a financial institution, have experience trading or working with structured products? It's an asset class (if it can be called that?) that really interests me and I'd be curious to get some insight on the work involved trading/issuing these structured securities (especially in contrast to traditional equities).
With the advent of these structured products (they're relatively new right?) I've seen some predictions that the demand for traders that have experience with these investment vehicles will likely continue to grow. Thanks in advance for any insight!