Monday, July 28, 2014

Autocallable Yielding 17% per annum on Tesla Motors by Barclays

Barclays has created a new structured note on Tesla motors. This note is interesting for two reasons. Last week we have noted how reverese convertible notes created on Tesla Motors by JP Morgan and RBC were different only by 75 basis points in coupon.

Firstly, Barclays also joined the bandwagon of issuers creating structured notes on TESLA motors. Secondly, they have increased the stakes by sweetening the deal with 17% coupon per year. Now they managed to increase this higher coupon by adding the auto callable feature.

Our quantitative metrics were based on historical data of last 4 years. Since this period relates to post financial crisis and stocks were rising from their rock bottom lows. This might not be sufficient to generate metrics. With that said, looking at metrics suggest this is a great investment with very little risk an investor can get.

Our risk score of 3 and probability of sure win is making this note very interesting for us.

Gatick advises investors to look for or create structures similar to this auto callable to make good return on their investment.

We are more than happy to go over the nuances of the underlying options and their risks.

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