Implicit option is a call option. Convertible bonds can be converted into ordinary shares, and the subscription amount is the face value of convertible bonds during the conversion period, and the conversion price is the subscription price. Generally speaking, investors will only convert shares when the market price of stocks is higher than the conversion price, otherwise it is equivalent to buying stocks at a price higher than the market price, which is equivalent to call options.

For convertible bonds, when there is a resale clause, generally speaking, the resale clause means that when the underlying stock price is lower than the conversion price and a certain time requirement is met, investors can resell their convertible bonds to the issuer at the agreed price (that is, the resale price) within a specified time (all these depend on the issuance terms of convertible bonds), and ordinary investors will only implement this clause when the market price of convertible bonds is lower than the resale price.

When there is an early redemption clause for convertible bonds, generally speaking, the early redemption clause means that when the underlying stock price is higher than the conversion price and meets certain time requirements, the issuer can redeem the convertible bonds in advance, and the redemption price is the early redemption price. If the issuer implements this clause, it is equivalent to the investor holding a call option.