S&P 500-linked notes provide opportunity for optimists; Deutsche Bank to sell Treasury-linked BUyS By Sheri Kasprzak

New York, Feb. 6 - Despite volatility in the stock market, some investors are keen to invest in the S&P 500 index - without having to actually invest in any specific stocks. The structured products market makes this ideal for those investors who are optimistic, but cautiously so, said market insiders.

"Investing in a note linked to the index is actually pretty smart in a market like this," noted one sellside source reached Friday morning.

"A lot of retail investors are very intimidated by individual stocks right now. Investing in the health of the actual index, though, makes good sense. Does it make sense that, maybe, in the next two years, the S&P has made big gains. Sure. It's not going to happen in the next month, so maybe it's not right for short-term investors."

Deutsche Bank's S&P notes

Among the S&P-linked notes out there, Deutsche Bank AG, London Branch said Friday it is offering CPI-Indexed Buffered barrier Rebate notes linked to the index with a two-year term.

Investors will receive, at maturity, par plus the principal amount times the participation rate - which is expected to be between 100% to 125% - times the index return plus inflation adjustment, assuming a barrier event does not occur and the ending index level is greater than or equal to the initial index level. The principal is protected up to a 25% index decline, but investors could lose up to 75% of the investment, based upon inflation adjustment.

A barrier event occurs when, on any trading day during the observation period, the index level is greater than the upper barrier of 155% of the initial index level.

Deutsche Bank's BUyS

In other news at Deutsche Bank, the investment bank is also planning to sell capped Buffered Underlying Securities linked to the ProShares UltraShort 20+ Treasury Fund.

The 18-month securities pay a return of 150% of the appreciation of the fund, up to a 16% to 20% fund cap, to be determined at pricing on Feb. 24.

The zero-coupon securities have a maximum return of 24% to 30%, which will also be determined at pricing. Investors could lose up to 90% of their initial investment should the fund decline.

ABN's two Freeport-McMoRan notes

In other news, ABN Amro Bank NV is gearing up to price two more high-coupon reverse exchangeables linked to Freeport-McMoRan Copper & Gold Inc.'s shares.

Freeport's name has cropped up as a reference stock for a few offerings recently, and now ABN Amro plans to offer two Reverse Exchangeable Securities linked to the copper producer.

Both of the reverse exchangeables have 23.5% coupons with 60% knock-in levels.

Earlier this month, ABN Amro sold $1.2 million in 20.75% reverse exchangeables linked to Freeport's shares with a 50% knock-in level.

Despite the high coupons attached to the ABN Amro notes, at least one investment bank recently announced plans to sell reverse exchangeables linked to Freeport's stock with a meager 5.875% coupon.

Shares of Freeport-McMoRan were up $1.46 on the day to close at $29.81, and up another 38 cents in after-hours trading (NYQ: FCX).

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