I had some interest in the unusual security that I bought, MKZ, described in this post from earlier today: Bought 100 MKZ at 9.91 in the Roth IRA I added another 100 today in a taxable account (see disclaimer) and will discuss all of my purchases today in tomorrow's post.
I would add that the other security MKN is very similar except it has a 33% maximum, and matures a few months earlier in 2014 compared to MKZ. And there is another important distinction for the RBs out there. MKN has a starting value for the first interest period of 112.43. Okay, that could be good or bad depending on what happens in the next 3 months or so. What is 133% of 112.43? That number is 149.53. The index closed today at 139.47: MDC - Java Chart - WSJ.com One day over the maximum during the relevant annual period will cause a reversion back to 3%. The index is now up about 24% as of today's close from MKN's starting value of 112.43. So it could be a tight squeeze, down to the wire so to speak. MKZ has more room to run before hitting its maximum described in the earlier post from today.
MKZ: Pricing Supplement
I got the starting values from quantumonline.
The futures contract on the index only gives you the market's best guess of what the index value may be. The only relevant question is what it turns out to actually be.
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