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Strategies & Market Trends : Temp. Home of Cooperative Group-Trading

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To: Zeev Hed who wrote (357)	6/24/1999 1:44:00 PM
From: Gerald Walls	Read Replies (1) of 790

Zeev, I partially understand the concept of the floorless, but before I just jump into something I need to understand it fully. Could you please give me a link where it's discussed in detail? My understanding is that the bond can be converted at a set price, lower than the market, which allows immediate shorting to lock in the differential. This essentially is a call option if the debt part is ignored. The floorless, though, also allows conversion at below the set price, which is like an option that has a floating strike. Why is there a fiction of a set price if the strike declines with the stock price? What am I missing?

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