Smoking Securities

Half Baked High Finance

The Best ETN (and therefore the most dangerous)

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Take a look at the spread between LSC and DJP starting in late June 08.

Clearly this post is a little late to the party, but… WOW.

LSC is an ETN that replicates a technically traded long/short commodities index. It offers a compelling advantage over other commodities ETN’s like DJP, and thus I will keep an eye on it. To track the underlying, Bloomberg SPTICTR:IND.

Sadly, it is less liquid than DJP, and contains credit risk via HSBC USA.
Clearly the credit risk is very real as HBC is barely a week from its lows.

A debt product whose underlying is a technically managed commodity index is awesome for many reasons, but until HBC can get its act together, I’m too chicken to jump into this pool.
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Written by chucklesamadeus

November 30, 2008 at 10:23 am

Posted in DJP, HBC, LSC

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