The average daily value of trading in ETNs (Exchange Traded Notes) was NOK 31.3 million in January, with an average of 897 transactions per day.
The level of trading in January was a record high in both NOK terms and in terms of the number of transactions. The number of transactions was more than double the figure for last year (109% higher), while in NOK terms the average daily value of trading for January was 55% higher than in 2015 as a whole.
An Exchange Traded Note (ETN) is an instrument whose value is tied to the development of a given underlying share or market. The ETNs listed on Oslo Børs are linked to individual shares, the OBX Index, foreign stock indices and commodities.
“More and more private investors are using ETNs. They are particularly popular in periods with a high level of volatility and sizeable price movements, but they are also being used as long-term savings products”, comments Jesper von Zweigbergk, Head of Derivatives at Oslo Børs.
ETNs are traded like shares, and bull and bear products enable investors to position themselves for markets to either rise of fall. A large range is available, and there are many different ETNs to choose from.
“The number of different products available has grown strongly, and we think this growth will continue. There is a broad selection of ETNs offering geared exposure to the development of their underlying assets, while the number of long-term ungeared investment products is growing. The ungeared products are suitable for long-term saving, while the geared products are more suited to shorter time horizons”, adds Jesper von Zweigbergk.
More about stock exchange listed products:
- ETP (Exchange Traded Products) is a generic term for issuer products that are traded on an exchange just like normal shares. Products in this group differ from shares principally in that they are issued by a bank, investment firm or fund manager, but are traded during exchange opening hours with bid and offer prices in just the same way as normal shares.
- ETFs (Exchange Traded Funds) are, as the name suggests, listed funds, and represent the most common type of issuer product in the world today.
- ETNs (Exchange Traded Notes) are a financial instrument where the value of the instrument is linked to the performance of an underlying market. The underlying market can, for example, be reflected through a selection of shares, through one or more indices, or through commodity prices. In addition, ETNs may be used to give investors the opportunity of exposure to markets that may otherwise be difficult to access.
- Unlike ETFs, which are funds, ETNs are debt instruments issued with recourse to the issuer’s balance sheet. In practice, this means that in addition to the exposure to market risk that is always associated with investing in securities, investing in an ETN also involves exposure to the credit risk represented by the issuer.
- Brochure: Exchange Traded Products (in Norwegian)