Structured Yield Product Exchangeable For Stock - STRYPES

AAA

DEFINITION of 'Structured Yield Product Exchangeable For Stock - STRYPES'

A type of convertible bond issued by companies that pays a quarterly cash coupon and can also be exchanged for a certain number of shares or receive the cash equivalent at maturity. STRYPES were created and trademarked by Merrill Lynch, and are traded on major exchanges.

INVESTOPEDIA EXPLAINS 'Structured Yield Product Exchangeable For Stock - STRYPES'

STRYPES were created to help sell the stock of a company that pays a low dividend. The yield paid on the STRYPES makes up for the low dividend yield until the investor converts the STRYPES into common shares.

Executives can also use STRYPES to gain cash periodically without significantly diluting a company's share value.

The features of the STRYPES allows high-risk companies to access investment capital that might otherwise be unattainable.

RELATED TERMS
  1. Hybrid Security

    A security that combines two or more different financial instruments. ...
  2. Mandatory Convertible

    A type of convertible bond that has a required conversion or ...
  3. Busted Convertible Security

    A convertible security that is trading well below its conversion ...
  4. Irredeemable Convertible Unsecured ...

    A type of security that can be used to purchase underlying common ...
  5. Contingent Convertibles - CoCos

    A security similar to a traditional convertible bond in that ...
  6. Conversion Price

    The price per share at which a convertible security, such as ...
Related Articles
  1. Bonds & Fixed Income

    Convertible Bonds: An Introduction

  2. Options & Futures

    These Financial Products Are Too Complex ...

  3. Investing

    Where does the stock come from when ...

  4. Investing

    What are 'death spiral' convertible ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center