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.

Written by chucklesamadeus

November 30, 2008 at 10:23 am

Posted in DJP, HBC, LSC

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