What does ELN stand for in financial terms?

Equity Linked Note (ELN) refers to a type of structured financial product that combines characteristics of a bond with those of equity derivatives. Specifically, the return on an ELN is linked to the performance of a specific equity instrument, usually a stock or a stock index. This means that the investor receives interest payments based on the performance of that equity, which can also lead to capital appreciation if the linked equity performs well.

ELNs are designed to provide investors with a way to gain exposure to potential equity returns while also having some fixed-income features. They can be attractive to investors looking to balance risk and return, benefiting from participation in the equity market's upside without fully engaging in the risks of direct stock ownership.

Other options do not accurately represent the established meaning of ELN within the financial industry or do not tie back to the investment structure of linked notes. For instance, while "Electronic Linked Note" may emphasize a technological component, it misses the core equity relationship. "Extended Liability Note" and "Equity Loss Note" do not correspond to any standard financial instruments recognized in modern finance. Thus, the correct designation of ELN as Equity Linked Note captures both the nature and function of this financial product.