Home >  Term: convertible arbitrage
convertible arbitrage

A practice, usually of buying a convertible bond and shorting a percentage of the equivalent underlying common shares, to create a positive cash flow position (with expected returns above the riskless rate) in a static environment and benefits from capital appreciation should the convertible's premium rise. This form of investing is far from riskless and requires constant monitoring. See: Chinese hedge and setup

0 0

Creator

  • Jessehe
  •  (V.I.P) 32013 points
  • 40.13% positive feedback
© 2024 CSOFT International, Ltd.