The instrument is called a ‘clap note’ because it provides the same interest rate ‘out of two different hands’ (“it takes two hands to clap”). For example, a so-called “10/10 Clap Note” is one that is sold at a 10% discount on the face value while simultaneously paying 10% annual interest. The investor in a $100,000 10/10 clap note can buy the note at a discount of 10%, or $90,000 yet be paid 10% interest per year on the full face value of the note (i.e. $10,000). Then, since the note is an interest-only instrument, when the term expires, the investor receives the full face value, which includes another 10% profit.