A bond whose redemption value is linked to a price index (e.g. FT-SE 100 Index; see Financial Times Share Indexes) or a commodity price (e.g. the price of gold). Thus, a holder of a bull note will receive on redemption an amount greater than the principal of the bond if the relevant index or price has risen (but less if it has fallen). With a bear note the reverse happens. Bull and bear notes are therefore akin to an ordinary bond plus an option, providing opportunities for hedging and speculating.
Subjects: Financial Institutions and Services.