Sentences with phrase «convertible arbitrage»
Convertible arbitrage refers to a strategy in investing where people aim to profit from the price differences between a company's convertible securities, like bonds or preferred stocks, and its common stock. They do this by simultaneously buying the convertible securities and selling short the common stock. This strategy allows for potential gains from the difference in prices and can be profitable when done correctly. Full definition
In convertible arbitrage hedge funds, managers attempt to identify convertible bonds and preferred shares that are mispriced in relation to the underlying stocks.
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Convertible arbitrage holds long positions in convertible bonds while shorting the stock of the underlying company.
A typical convertible arbitrage position is to be long the convertible bond and short the common stock of the same company.
Convertible Arbitage - a convertible arbitrage is a plan of strategy involving the purchase of convertible stock.
A convertible arbitrage is mostly exercised with hedge funds... A hedge fund is an investment fund opened to limited range of investors and pays a performance fee to its investment managers Hedge funds are used to offset losses in the principles market, most commonly...
The common element is that any long position taken in a specific equity is offset by a short position in either a merger partner (risk arbitrage), an «overvalued» member of the same sector (long / short paired trading), a convertible bond (convertible arbitrage), a futures contract (index arbitrage) or an option contract (volatility arbitrage).
There are three different types: equity market neutral, merger arbitrage and convertible arbitrage.
Hedge funds have all forms of trading strategies including market neutral, distressed, global macro, convertible arbitrage, fixed income arbitrage and fund of funds, among others.
The common element is that any long position taken in a specific equity is offset by a short position in either a merger partner (risk arbitrage), an «overvalued» member of the same sector (long / short paired trading), a convertible bond (convertible arbitrage), a futures contract (index arbitrage) or an option contract (volatility arbitrage).
There are all kinds of risk arbitrage: currency arbitrage, convertible arbitrage, commodity hedging, derivatives arbitrage, Corporate Events Risk Arbitrage (CERA), etc..