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Alternative Market Briefing

Credit Suisse launches first covered call gold ETN in the US

Wednesday, January 30, 2013

Bailey McCann, Opalesque New York:

After ringing the opening bell on the NASDAQ in New York City today, Credit Suisse announced the launch of the Gold Shares Covered Call ETN (GLDI). GLDI is the first exchange traded product in the US market to offer investors access to a covered call strategy on a gold investment, and is designed to pay variable monthly coupons. GLDI is an exchange traded note (ETN), which differs slightly from the more common ETF or exchange traded fund, in that it includes some bond-like aspects.

"This is the first time a covered call strategy around gold has been done as an ETN in the US and there are currently no ETFs that offer this type of exposure," explains Greg King, head of exchange traded products in Credit Suisse’s Investment Bank in an interview with Opalesque.

GLDI tracks the Credit Suisse NASDAQ Gold FLOWSTM (Formula-Linked OverWrite Strategy)103 Index, and maintains a notional long position in shares of the SPDR® Gold Trust ETF (GLD) while notionally selling monthly out-of-the-money call options on that position. Holders of GLDI will be entitled to receive variable monthly payments based on the notional option premiums received from the sale of the covered call options each month.

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