"Absolute Return CD" wtf

Discussion in 'Trading' started by IronFist, Jul 25, 2008.

  1. JamesJ

    JamesJ

    are you sure it says up between 16 and 18%...

    it's probably a bit different with some sort of barrier, cause 10% would be too much.
     
    #11     Jul 25, 2008
  2. Illum

    Illum

    Ouch..





    lol
     
    #12     Jul 25, 2008
  3. Here's what she emailed me:

    CD1 - DJIA Absolute Return CD
    Range 15%
    Must never TRADE outside of barriers

    CD2 - DJIA Absolute Return CD
    Range 12.5%-14.5%
    Must never CLOSE outside of barriers

    CD3 - SP500 Absolute Return CD
    Range 12.5%-14.5%
    Must never CLOSE outside of the barriers

    CD4 - SP500 Absolute Return CD
    Range (lower) 10% / (upper) 19.75-22%
    Must never CLOSE outside of the barriers


    So it looks like that last one has a lower barrier but the rest don't.

    I think the online bank idea sounds good. FDIC insured. Take your money out whenever you want. Better return than the other CDs (which are like 3% or less).
     
    #13     Jul 25, 2008
  4. JamesJ

    JamesJ

    you have to keep in mind, that the bank hedges this position with options and t-bills and they want to earn some money (and usually a lot with this kind of structures products)...

    and volatility is high now, so those barriers are likely to be hit...

    maybe it's better to go with good old t-bills or similar safe stuff...
    or exchange your money into a different currency where you get a real return (and hope for a further weakening of the inflatonary USD)

    i'm swiss and i'm happy with my swiss francs... ;)
     
    #14     Jul 25, 2008
  5. LOL
     
    #15     Jul 25, 2008
  6. Hire some rocket scientist Ph.Ds and get their expert opinion on these complex financial instruments and then do the opposite.
     
    #16     Jul 26, 2008