Convertible Bond

Business / Finance / Convertible Bond: 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 benifit from capital appreciation should the convertible's premium. This form of investing is far from riskless and requires constant monitoring. See: Chinese hedge and set-up.

Other Words for Bond

Bond Noun Synonyms: tie(s), shackles, chains, fetters, manacles, handcuffs, trammels, thongs, cord(s), rope(s), restraint(s), constraint(s), check(s), control(s), rein(s)
Bond Verb Synonyms: cement, bind, hold together, stick, cohere
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Convertible Hedge

Business / Taxes / Convertible Hedge: When you use a convertible hedge, you buy a convertible bond, which you can exchange under certain circumstances for shares of the company’s common stock. At the same time, you sell short the common MORE

Convertible Preferred Stock

Business / Accounting / Convertible Preferred Stock: Preferred stock that can be converted to common stock at a specified conversion rate. MORE

Bond Value

Business / Finance / Bond Value: With respect to convertible bonds, the value the security would have if it were not convertible. That is the market value of the bond minus the value of the conversion option. MORE

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