The Credit Suisse X-Links Gold Shares Covered Call ETN, listed on the NASDAQ under the ticker symbol GLDI, is a type of exchange-traded note (ETN) that tracks the performance of a specific investment strategy. This strategy involves implementing a 'covered call' approach on the shares of the SPDR Gold Trust, commonly referred to as GLD Shares.
The covered call strategy works by selling monthly call options on the GLD Shares, which generates notional option premiums. These premiums are essentially income earned from selling the right, but not the obligation, to buy the GLD Shares at a predetermined price. The strategy also takes into account the notional trading costs associated with buying and selling the GLD Shares and the call options.
The index that the ETN tracks measures the return of this covered call strategy by reflecting changes in the price of the GLD Shares and the notional option premiums received, minus the notional trading costs incurred. This means that the ETN's performance is directly tied to the performance of the GLD Shares and the success of the covered call strategy.
As an ETN, GLDI is a debt instrument issued by Credit Suisse, which promises to pay the holder a return based on the performance of the underlying index. This allows investors to gain exposure to the covered call strategy on the GLD Shares without having to directly implement the strategy themselves.
Credit Suisse, the issuer of the ETN, is a global financial services company with a long history of providing investment products and services to institutional and individual investors. The company is headquartered in Switzerland and has operations in many countries around the world.