The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Structured notes: Wealthy seek to profit from unstable markets

High-net-worth investors are keen to use structured notes to profit from volatility in the equity market, and to take advantage of opportunities elsewhere. John Ferry looks at what is on offer.

Principal protection

UNLIKE, SAY, THE manager of a long-only equity fund, who might find it difficult to pull in new customers during a bear market, a structured note seller is in the enviable position of being able to present clients with an upbeat investment case no matter what the market conditions. That’s because it is just as easy to engineer a derivatives-based investment that will increase in value when markets go down as it is to put together a product that will profit when markets are rising. They can even be structured to give an attractive return when markets are moving sideways. It is no surprise then that the credit crisis and subsequent increase in equity market volatility has not fazed structured note issuers. Indeed, they see opportunities, especially for selling to private bank networks, whose clients are relatively quick to take advantage of new opportunities compared with the broader retail market.

The big story, of course, is the increase in equity market volatility. Until the summer of last year, the world’s equity markets were characterized by perennially low volatility. Not so now. At the start of July, implied volatility on the S&P 500 stood around 15.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree