Analysis of Convertible Bonds Hedging Strategy and Risk with Common Stock

摘要：

This paper analyzes the hedging strategy and risks of convertible bonds with common stock.The purpose of hedging is to reduce and control risk.Undervalued convertible bonds offer an opportunity for conservative investors willing to use hedging techniques.Hedges can retain a portion of the stocks potential by selling short a limited quantity of underlying common stock against a convertible while reducing,or even eliminating,stock market risk.Or they can swap upside potential for downside profits by shorting more of the stock.Carefully balancing the use of margin and hedging ratios can further enhance the risk reward relationship.

关键词： Convertible bond Hedging Strategy Hedging Risk

作者: Haiyan Wu Chaoqun Ma Wenbin Tang

作者单位: Hunan University,China Changsha University of Science & Technology,China

会议类型: 国际会议

会议名称: The 2008 International Conference on Business Intelligence and Financial Engineering(BIFE 2008)(商业智能和金融工程国际会议)

会议地点: 长沙

会议语种:英文

页码: 633-636

在线出版日期: 2008-10-28（万方平台首次上网日期，不代表论文的发表时间）