Nordea expanding with new exchange-traded products

Associations, Banking, Markets, Statistics, Stock Markets — By on September 16, 2015 at 6:49 AM
oslo bors16/09/2015 – The range of exchange-traded products listed on Oslo Børs is expanding. Nordea is now listing 14 new bull and bear products to provide investors with exposure to the OBX Index and other foreign indices.

Nordea rang the opening bell on Wednesday 16 September to mark the admission of its new instruments to listing on Oslo Børs.

The newly listed securities are what are known as ETNs (Exchange Traded Notes), which are as easy to trade as shares. Bull and bear products enable investors to position themselves for the market to either rise or fall. Handelsbanken and DNB already offer a range of ETNs with commodities, individual shares or the OBX index as the underlying assets in both bull and bear variants and with gearing of up to five times the daily return.

Nordea’s ETN debut makes it possible to trade large, foreign indices such as the S&P 500, the DAX and the EURO STOXX 50. Nordea is also offering higher gearing than previously, with gearing of up to five times the return in the underlying market each day available.

Nordea Markets is the market maker for all the securities. This ensures there is liquidity in the securities during Oslo Børs’ trading hours in normal market conditions.

As Nordea’s ETNs are geared to offer returns of either two or five times the underlying asset, the level of risk associated with such investments is high. They are therefore best suited to experienced investors who have a clear view on where they expect the market to go, particularly over the short term. Bull securities are for those who think the market will rise, while bear securities are for those who think it will fall.

More about exchange traded products:

  • ETP (Exchange Traded Products) is a generic term for issuer products that are as easy to trade on an exchange as shares. As a product group they differ from shares primarily in that they are issued by a bank, investment firm or fund manager, but are traded during exchange hours with bid and offer prices in just the same way as for shares.
  • ETFs (Exchange Traded Funds) are, as their name suggests, funds listed on an exchange, and they are the most common type of issuer product in the world today.
  • ETNs (Exchange Traded Notes) are instruments whose value is linked to the performance of an underlying market. The underlying market can, for example, be reflected in a basket of shares, one or more indices, or commodity prices. ETNs may also be used by investors to gain exposure to markets that are difficult to access.
  • Unlike ETFs, which are funds, ETNs are debt instruments backed only by the creditworthiness of the issuer. What this means in practice is that investors are exposed not only to the market risk that is always associated with investing in securities, but also to credit risk in relation to the issuer.
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