It stands for super upside note; a structured equity-linked note which is designed to allow investors to fully leverage a bullish view on a specific equity by using dividends to effectively purchase a call option on the underlying stock. In this meaning, this note resembles covered writing, though it starts with estimating the present value of expected dividend payouts of a specific stock.

For instance, suppose an equity index, underlying a 5-year super upside note, is expected to pay off a 3% yield every year for the next five years, and the present value of dividends is estimated to be, say, 12%. This annuity stream will be stripped out and used to purchase five-year call options on the index. If the current price of an ATM index call option is 25%, then this note will provide a call coverage of:

Present value of dividends/ call premium = 12%/25%= 0.48 times or 48%.

Therefore, the note holder uses all dividends to buy an opportunity to participate in the upside “one for 1.48”, whilst participating one for one in the downside.

It is also referred to as a stock upside note (SUN) or stock upside note security (SUNS).