Convertible Arbitrage

An investing strategy that involves the long position on a convertible security and a short position in its converting common stock.


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



Trading the Odds with Arbitrage - Profiting from arbitrage is not only for market makers--retail traders can find opportunity in risk arbitrage.

Convertible Bonds: An Introduction - Find out about the nuts and bolts, pros and cons of these securities.
Related Terms

Arbitrage

Common Stock

Conversion Price

Convertible

Short

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