It stands for equity-linked instrument; an instrument (equity instrument or debt-equity hybrid instrument) that combines fixed-income instruments (notes/ deposits) with embedded stock options (whereby the holder can take direction on the market- bull, bear or range). The return component of the note depends on the performance of a single equity security (a stock), a basket of equity securities, or an equity index. Equity linked-notes have many types including: equity-linked notes (ELNs), equity-linked deposits (ELDs) and equity-linked contracts.

By nature, equity-linked notes are associated with a high degree of risk, due to the great exposure to equity market (the equity component is the main driver of performance, with limited checks on extreme scenarios as in the case the underlying share price moves unfavorably and against all odds. In which case, the holder may potentially lose the entire amount invested. The maximum return on investment is typically limited to a predetermined monetary amount if a holder’s views come true.