If you are just starting to learn about structured products, or even if you have been at it for a while, sometimes the vocabulary can be a bit confusing and daunting. Just the concept of a structured product can take a little time to wrap one’s mind around. I talk a lot about structured products, their terms, benefits, risks, et al, but I need to be clear what, exactly, I am talking about.
The term structured product has various meanings depending on which investor or commentator is using it. For example, a commentator on the Enron collapse may discuss structured products when describing the Special Investment Vehicles (SIV) that were used to move underperforming assets off of their balance-sheet. Or, an institutional bond trader or salesman may talk of structured products and mean a structured asset backed security, like a synthetic collateralized debt obligation.