Exchange Traded Products – ETP


DEFINITION of 'Exchange Traded Products – ETP'

A type of security that is derivatively-priced and which trades intra-day on a national securities exchange. Exchange Traded Products are derivatively-priced, where the value is derived from another investment instruments such as a commodity, currency, share price or interest rate. Generally, exchange traded products are benchmarked to stocks, commodities, indices or they can be actively managed funds. Exchange traded products include exchange traded funds (ETFs), exchange traded vehicles (ETVs), exchange traded notes (ETNs) and certificates.

BREAKING DOWN 'Exchange Traded Products – ETP'

The most popular exchange traded product is the exchange traded fund (ETF). These are securities that track an index, commodity or basket of assets. Exchange traded notes, on the other hand, are a type of unsecured, unsubordinated debt security. The value of an ETN can be affected by the credit rating of the issuer and not just changes in the underlying index. Exchange traded products have experienced huge growth since they were introduced. Different tax treatment applies to the various types of exchange traded products.

  1. Derivative

    A security with a price that is dependent upon or derived from ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Exchange Traded Notes - ETN

    A type of unsecured, unsubordinated debt security that was first ...
  4. Active Management

    The use of a human element, such as a single manager, co-managers ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based ...
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  1. Can commodities also be investments?

    Commodities allow investment in several different ways that benefit investors. Commodities may be purchased and held with ... Read Full Answer >>
  2. Are ETFs required to pay out a percentage of income as dividends?

    The exchange-traded fund (ETF) is a relatively new investment vehicle, hitting the market in 1993. A fund company can create ... Read Full Answer >>
  3. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  4. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  5. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  6. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>

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