PEPS, PERCS, Exchangable, PICS, PRIDES, DECS, ACES, MEDS

nitro

nitro

I put this thread in this section because PEPS behave [somewhat] like an option.

I was wondering, does anyone here on ET use these for investment purposes? What about trading them versus the common or the preferred?

Also, how the heck does someone buy or sell one of these things?

Any other ramblings that come to mind feel free to comment...I find these things fascinating...

nitro
 
LoL, I have thought about asking the same thing. These products have many of the same characteristics as options. I think they are mostly used by institutions who are restricted from trading the regular derivative products. I Looked around once to see if any of them are exchange traded but found nothing(forgot which one I was specifically looking for).
 
Many of them are traded on the AMEX.

For instance -
Issuer Name Category Product Symbol Expiration Date

Merrill Lynch Equity-Linked Term Note 8 % Callable Stock Return Income Debt Securities (STRIDES) linked to Adobe Systems, Inc ADY 05/14/04
UBS AG Equity-Linked Term Note 16.25% Amgen Inc. GOALs AGG.A 11/18/02
Merrill Lynch Equity-Linked Term Note 8% Applied Material, Inc. Callable "STRIDES" AMW 02/23/04
ABN Amro Equity-Linked Term Note 12% General Electric Co. Reverse Exchangeable Securities ATC.A 12/04/02
Merrill Lynch Equity-Linked Term Note 1% AT&T Stock Linked Notes ATM.A 07/20/06
Morgan Stanley Equity-Linked Term Note 8 % Stock Participation Accreting Redemption Quarterly-pay Securities ("SPARQS") BCQ 03/30/04
Merrill Lynch Equity-Linked Term Note Callable Broadband HOLDRS "MITTS" BDM 09/13/07
Merrill Lynch Equity-Linked Term Note 6% Bed Bath & Beyond Inc. Callable "STRIDES" BDQ 02/11/04
 
Ah o.k., Some of them are exchange traded. I couldn't find a quote though for the reverse exchangeable stuff, rex.w or rex.u, or the issues by Lehman Brothers. The site says they are listed on the Amex. Anybody know how to pull these up to get a bid/ask?
 
Trajan,

You can get a real-time Bid/Ask on these securities from most B/D sites. Also, you could go to Yahoo Finance, if all else fails. Enter in the ticker symbol. When the chart comes up, re-enter the symbol in the field, and select Real-Time Mkt from the drop-down menu.

Hope this helps.
 
Originally posted by nitro
I put this thread in this section because PEPS behave [somewhat] like an option.

I was wondering, does anyone here on ET use these for investment purposes? What about trading them versus the common or the preferred?

Also, how the heck does someone buy or sell one of these things?

Any other ramblings that come to mind feel free to comment...I find these things fascinating...

nitro
More...

Nitro,

Many of these securities have both embedded Put and Call options in them. I have created positions w/ STRIDES and the sort, combined with exchange-traded options. The spread on an Equity Derivative is usually wide.

Hope this helps.
 
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