Convertible Arbitrage

What Does Convertible Arbitrage Mean?
An investing strategy that involves the long position on a convertible security and a short position in its converting common stock.

Investopedia explains Convertible Arbitrage
This strategy attempts to exploit profits when there is a pricing error made in the conversion factor of the convertible security.

Filed Under: Active Trading, Bonds, Fixed Income

Related Terms

Arbitrage
Common Stock
Conversion Price
Convertible
Short
More Related Terms

Related Links

Leverage Your Returns With A Convertible Hedge - Find out how you can maintain your income stream by using this type of bond strategy.
Convertible Bonds: An Introduction - Find out about the nuts and bolts, pros and cons of investing in bonds.
Trading the Odds with Arbitrage - Profiting from arbitrage is not only for market makers--retail traders can find opportunity in risk arbitrage.

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