Debt Exchangeable for Common Stock - DECS


DEFINITION of 'Debt Exchangeable for Common Stock - DECS'

A debt instrument that provides the holder with coupon payments in addition to an embedded short put option and a long call on the issuing company's stock.

BREAKING DOWN 'Debt Exchangeable for Common Stock - DECS'

DECS instruments provide the holder with the right to convert the security into the underlying company's common stock.

PRIDES securities are one example of debt exchangeable for common stock.

  1. Long (or Long Position)

    1. The buying of a security such as a stock, commodity or currency, ...
  2. Preferred Redeemable Increased ...

    First introduced by Merrill Lynch, PRIDES are synthetic securities ...
  3. Convertibles

    Securities, usually bonds or preferred shares, that can be converted ...
  4. Naked Put

    A put option whose writer does not have a short position in the ...
  5. Convertible Debenture

    A type of loan issued by a company that can be converted into ...
  6. Call

    1. The period of time between the opening and closing of some ...
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