Definition
A convertible hedge is a trading strategy that consists of taking a long position in a company's convertible bond (or debenture), and a simultaneous short position in the amount of the conversion ratio in the underlying common shares. The convertible hedge strategy is designed to be market neutral while generating a higher yield than would be obtained by merely holding the convertible bond or debe
In Panel Profits
In the Panel Profits market platform, Convertible Hedge: What it Means, How it Works, Example applies standard equities & market mechanics principles to comic assets and physical collections. Trading volume and liquidity spreads reflect secondary market dealer and auction transactions.
Common mistakes
Do not infer unobserved prices.