An equity linked product (equity linked note, ELN) that combines an equity-linked debt instrument with an option that allows a bear (falling) bet on the underlying price. The payoff of an equity-linked note is typically determined by the performance of an individual security, a basket of securities or an index. A bear equity-linked note can be perceived as a traditional deposit combined with the premium received from issuing/ selling a call option on the underlying securities.

Upon maturity, the amount that the issuer of a bear equity-linked note will repay the investor depends on the strike price and the market value of the underlying securities at that time. If, on the valuation date, the value of the securities is above the strike price minus the premium received, the buyer/ holder will suffer a loss that could be equal to the entire capital amount (principal) in extreme cases. In which case, the holder of the note would only receive underlying assets (stocks). If the underlying asset price on the valuation date is lower than the specified strike price of the ELN, the value of the note is determined as its nominal value.