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Convertible Arbitrage

Definition: [crh] In the context of hedge funds, a style of management that involves the simultaneous purchase of a convertible bond and the short sale of shaDefinition: res of the underlying stock. Interest rate risk may or may not be hedged. Definition: [crh] A practice, usually of buying a convertible bond and shorting a percentage of the equivalent underlyingDefinition: A> common shares, to create a positive cash flow position (with expected retuDefinition: rns above the riskless rate) in a static environment and benefit from capital appreciation should the convertible's Definition: F="/?rd=premium">premium rise. This form of investing is far from riskless and requires constant monitoring. See: Chinese hedge and <Definition: A HREF="/?rd=setup">setup

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