Convertible bond is a financial instrument that domestic investors can participate in the transaction at present. Compared with stocks, convertible bonds are smaller; Compared with high-end varieties such as futures and options, convertible bonds are more "grounded". In fact, convertible bonds are a kind of financial assets issued by listed companies, which can be converted into company shares under certain conditions. From a macro perspective, convertible bonds are an important means of financing for listed companies. The interest cost of this financing method is far less than that of bank loans.

Zazie Hoko

In recent years, more and more listed companies have issued convertible bonds to support their specific projects. Objectively, convertible bonds strongly support the development of domestic economy. Therefore, under the premise of compliance, the regulatory authorities usually approve the application of listed companies to issue convertible bonds at a faster speed. For investors, convertible bonds provide a good investment choice.

Zazie Hoko

However, the risk of convertible bonds trading in the secondary market is relatively high. For some convertible bonds with active capital concentration, the risk of price fluctuation of convertible bonds will be infinitely amplified. On the one hand, the price fluctuation of convertible bonds may be greater than that of stocks, and the turnover of convertible bonds with concentrated speculation of some hot money is more likely to reach more than one billion yuan a day. On the other hand, convertible bonds are more flexible than stocks. Investors who buy and sell convertible bonds can trade T+0 on the same day. This gives some investors the opportunity to sell low and sell high in the day and close their positions to lock in profits. However, for high-priced takers, the losses caused by the debt-to-equity swap on the same day may also be quite huge. In addition, convertible bonds also have a strong redemption mechanism. If investors are not familiar with this mechanism, they may suffer foreclosure losses.

Therefore, investors must fully estimate their risk tolerance before participating in convertible bond investment.

In fact, there is another type of investors who can participate in convertible bond investment in a low-risk way. This way is to buy new convertible bonds, commonly known as "bonus hunter". Investors participating in stock innovation must hold the stock market value as the purchase quota. Investors can participate in the conversion of bonds into new bonds without holding any stocks. After the new lottery, investors can sell convertible bonds for profit on the day of listing. According to the experience in recent years, the price of convertible bonds is at risk of breaking on the day of listing. However, in practice, the winning bidder has a higher probability of leaving the scene with profit.

Investment is risky, so be cautious when entering the market.