Liquid Yield Option Note - LYON

DEFINITION of 'Liquid Yield Option Note - LYON'

A zero coupon bond that is callable (by issuer), putable (by investor), and convertible. LYONs are synthetic products that are financially engineered by Merrill Lynch.

BREAKING DOWN 'Liquid Yield Option Note - LYON'

A LYON typically assures the holder a positive return. This return is maintained until the opportunity to put the security back to the issuer at a premium over the issue price no longer exists.

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  4. What are the advantages of investing in a callable bond?

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