Exchange traded notes (ETNs) are senior, unsecured debt securities of an issuer. They are designed to track indices (net of investor fees) and allow investors to gain exposure to such indices with relative ease.

ETNs are listed on exchanges and can be traded through a brokerage account like any other listed security.

• Access - ETNs can offer investors access to market sectors and investment strategies that may be otherwise difficult to reach either through ETFs, index mutual funds or other investment strategies.
• Efficiency - ETFs and index mutual funds may be subject to restrictions in their investments. ETNs are not bound by all of the same restrictions and may, therefore, be a more efficient method to get exposure to certain investments.
• Less tracking error - ETNs may have less tracking error compared to ETFs and index mutual funds.

Learn more about ETN advantages and considerations.

ETN issuers are obligated to deliver the index performance less fees (upon redemption or maturity), whereas tracking error in ETFs and index mutual funds, if any, is borne by investors.

Opta ETNs track a variety of indices in different asset classes, e.g., the LBCI Pure Beta Index (commodities) and the S&P Listed Private Equity Index. ETNs covering other asset classes and strategies are currently in development. New product announcements will be posted on this website.

As ETNs are exchange-traded securities, they can be bought and sold in the secondary market just like exchange-listed stocks. They can be traded through most standard brokerage accounts.

The smallest investment unit is a single ETN. In most cases, the original issue price is $50 per ETN, although any subsequent issues would be at the then-current Indicative Value.

In addition to being able to trade ETNs on an exchange, investors also have the option to require the Issuer to redeem (buy back) large blocks of ETNs on a daily basis. The Indicative Value is meant to approximate the intrinsic economic value of an Opta ETN, and is the price at which the Issuer stands ready to redeem (buy back) the ETNs (subject to a minimum size requirement; please see the relevant prospectus for details). The ETN Intraday Indicative Value (IIV) is calculated as follows:

Intraday Indicative Value = Principal Amount per ETN * (Current Index Level/Index Level at Inception) * Fee Factor

Where:

Principal Amount per ETN = $50

Fee Factor = (1- Annual Investor Fee) ^ (Number of days elapsed since inception/365)

The market trading price is the price quoted on an exchange for an ETN and is ultimately dictated by supply and demand for the security. The trading price of an ETN may vary from its Indicative Value. The market trading price of Opta ETNs is generally expected to track the Indicative Value due in part to the ability of investors to require the Issuer to redeem (buy back) ETNs for a cash payment equal to the applicable Indicative Value on a daily basis (subject to minimum size requirements). There is however no guarantee that this will be the case as the market trading price may be affected by numerous factors, including the Issuer's credit rating.

In most cases the Intraday Indicative Value (IIV) is calculated and disseminated every 15 seconds during the trading day and is available from the relevant exchanges, financial data services (e.g., Bloomberg and Reuters), and the "Opta ETNs Market Data" section of this website (displayed with a 20 minute minimum delay).

The market trading price varies during trading hours and is available from the relevant exchanges and financial data services.

Investors may exercise their option to require the Issuer to redeem (buy back) large blocks (typically a minimum of 50,000 Notes) of a particular Opta ETN. Please refer to the relevant prospectus for details regarding the procedure and any applicable charges.

ETNs do not represent a direct holding in the underlying securities of an index. They are senior, unsecured debt securities and are backed by the credit of the issuer.

However, ETNs are designed to track indices (net of investor fees) and allow investors to conveniently gain exposure to various asset classes. ETN performance is linked to the underlying index performance because the issuer stands ready to redeem (buy back) the ETNs at Indicative Value for cash on a daily basis (subject to certain minimum size requirements).

Opta ETNs are not rated separately from the Issuer, but are backed by the credit of Lehman Brothers Holdings Inc. The intraday Indicative Value of the ETNs is determined solely by the level of the underlying index and the investor fees. However, market trading prices may be impacted by a change in the Issuer's credit rating.