Huh. Investopedia has a page on autocallable note ETFs, it saysBasically trying to make single stocks look attractive to an income-seeking investor, the kind that might have bought a t-bill or bond. Since yields on those are lousy and not keeping up with cost of living, people who are getting increasingly desperate will fall for these when they see the initial double digit yield payouts after the first year that they have been around. So you have even more buyers of momentum stocks who don't care about valuation.Why do you say that based on this link. Can you please elaborate?
Complicated risks that are hard to understand and predict? Sign me up!It's essentially a way to earn income when markets are flat or slightly down, but you give up the chance for big gains when markets soar, and you're still at risk if markets crash hard.
The tradeoff is getting potentially high monthly income in exchange for taking on complicated risks that can be hard to understand and predict.
I guess the ...advantage... of selling autocallable notes structured atop underlying single stocks, instead of broader indices, is that the volatility of a single stock price is going to be much higher than the volatility of a broader index, so it increases the chances of both the underlying price being too low or too high, in which case the autocallable note investor... loses? What's not to like.
Statistics: Posted by pseudoiterative — Thu Oct 09, 2025 6:26 pm — Replies 274 — Views 24845