02-27-2006, 12:22 AM
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by eShA</i>
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like v hav convertable bond that can be converted into share at certain condition(dnt go in detail of that), would it be possible to create such share that can be converted in to bonds .. if it is possible wht can be the possible benefit of it.
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It is possible and I think would only be tradeable on OTC market. Investor would want this security because he might have a bearish view on the stock market, and when the stock market is doing bad, he would exercise his option and convert his investment into bonds.
A typical investor for this security might be a pension fund. Assuming the PF is underfunded at present and given stock market might not do as good in future as it is doing now, trustees might invest in stocks that could be convertable into bonds if the market fall by some pre-determined strike price/level.
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like v hav convertable bond that can be converted into share at certain condition(dnt go in detail of that), would it be possible to create such share that can be converted in to bonds .. if it is possible wht can be the possible benefit of it.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
It is possible and I think would only be tradeable on OTC market. Investor would want this security because he might have a bearish view on the stock market, and when the stock market is doing bad, he would exercise his option and convert his investment into bonds.
A typical investor for this security might be a pension fund. Assuming the PF is underfunded at present and given stock market might not do as good in future as it is doing now, trustees might invest in stocks that could be convertable into bonds if the market fall by some pre-determined strike price/level.
