Many investors have sustained staggering losses in Apple Equity-Linked Structured Products sold by many Brokerage Firms. According to the Securities Law Firm of Menzer & Hill, P.A., many Firms sold hundreds of millions of dollars of these Apple Equity-Linked Notes to investors. The products include:
Single-Observation Reverse Convertibles;
Auto-Callable Notes linked to Apple's stock price.
These structured products transfer the downside risk of owning Apple stock, but limit the upside. The structured products are actually sophisticated trading instruments that are not appropriate for many investors. Furthermore, Brokerage Firms in many situations roll out these new products without properly training their advisors on the true risks associated with them, and consequently many investors are not properly informed of the true risks involved.
Now that Apple's stock price has dropped so significantly, many investors are realizing how risky the investment truly was.