CPM Group’s Jeffrey Christian, discusses some of the issues surrounding commodities indexed notes issued by major banks, explaining what they are, why they are popular with institutional investment fund management companies, and more. The video discusses the reality that most investors in such derivatives would not buy precious metals directly, and explains some of the reasons. The discussion also puts the size of precious metals derivatives into context. It gives some past examples of CPM-structured investment notes and managed accounts. It discusses the growth in precious metals derivatives’ notional value in relation to the increase in prices of the underlying silver, platinum, and palladium, and discusses the possibility that some of the derivatives being included in the OCC’s data on commodities derivatives may be mis-labeled, and actually be equity indexed derivatives.

Courtesy of The CPM Group