Fixed coupon notes (FCN) are a type of exotic option structured product with equity option and bond-like characteristics. FCNs act like bonds as investors provide capital to the note issuer in return for interest that is paid periodically. The issuer returns the initial capital (principal) when the note expires. The periodic yield payment is predetermined. FCNs act like equity in that it’s linked to the price performance of the underlying asset. And when the asset price is down, the investor experiences losses on their principal. FCNs are for investors with a neutral or bullish market outlook.