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Investment strategy that seeks to exploit pricing inefficiencies between a convertible bond and the underlying stock. Manager will typically long the convertible bond and short the underlying stock.
http://www.zephyrmanagement.com/glossary.html
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A hedge fund strategy that involves a portfolio manager buying convertible securities and selling the underlying equities, believing the convertibles to be underpriced.
http://www.cmra.com/html/body_glossary.html
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A strategy where a manager is long on the convertible securities, either bonds or preferred shares or both, and short on the common stock.
http://www.advisor.ca/product/canHedge/article.jsp
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Convertible arbitrage is an investment strategy often associated with hedge funds. It involves the purchase of convertible securities (i.e., bonds or preferred stock that may under specified circumstances be converted into common stock), as well as the short sale of the same issuer's common stock.
http://en.wikipedia.org/wiki/Convertible_arbitrage
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