structured note

Definition

Is a debt security with one or more special features, such as making payments based on an underlying index. For instance, a structured note is a bond which, instead of paying the typical interest payments, will use an index, such as the S&P 500, to determine the amount of the interest payment. This type of debt security is complex and is used primarily by sophisticated investors. By hedging the security on an underlying asset, the investor is sometimes able to receive larger returns on the investment.

Use structured note in a sentence

The structured note was cool because it was a debt security and it had some special features that were cool as well.

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You should try to make sure that you have done your research and that it will be a good investment before taking on a structured note.

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The structured note allowed Sam to regulate his payments based on current market conditions, thus putting him at ease in the greater scheme of things.

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