Principal Protected Notes

What are Principal Protected Notes?

A PPN is a combination of a zero-coupon bond and a call option on a particular underlying index (such as the S&P 500) whose expiration matches the PPN. Note that a PPN is not an equity but a debt instrument. At maturity, the holder gets the principal back, and any increase in net value. If there is a decrease in net value, the holder only gets the principal back. No dividends or interest payments are generated through the life of the PPN.


Learn the advantages, disadvantages, risks, questions to ask before investing, and much more...

For the rest of the article and full site access, please subscribe now.