also called a Chinese hedge, owning a common stock and selling short a convertible with the same underlying common stock in the hope that the convertible's premium will fall.
CHINESE HEDGE - Applies mainly to convertible securities. Trading hedge in which one is short the conve...
CHINESE WALL - Communication barrier between financiers at a firm (investment bankers) and traders. Thi...
Antithesis of Chinese hedge. Shadow Stock First, a public company may create a stock that strips out the market wide movements for the purpose of rewarding managers.
Antithesis of Chinese hedge. Settle price An average of the trading prices in the futures market during the last few minutes of trading. Settlement When payment is made for a trade.
Antithesis of Chinese hedge. Setoff Money held on behalf of a borrower that may be applied to repay the loan, but usually without the permission of the borrower.
See: Chinese hedge and setup Convertible bond General debt obligation of a corporation that can be exchanged for a set number of common shares of the issuing corporation at a prestated conversion price.
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president.
Chinese hedge ...
Set up
Applies mainly to convertible securities. Arbitrage involving going long the convertible and short a certain percentage of the underlying common. Antithesis of Chinese hedge.
(with expected returns above the riskless rate) in a static environment and benefits from capital appreciation should the convertible's premium. This form of investing is far from riskless and requires constant monitoring. See: Chinese hedge and ...
 See also: Convertible Bond, Convertible securities, Asymmetric information, Long position, Asset pricing model
  
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