Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Convertible Hedge investors? -- Ignore unavailable to you. Want to Upgrade?

To: Scott Mc who wrote (59)	2/2/1998 1:48:00 PM
From: Ted S	Read Replies (1) \| Respond to of 107

Hi Scott, Thanks for the input. For Full Hedges: 1. You mentioned that the conv can be selling over par and that is ok. So is your concern only when there is a possibility of the conv being called? Also, is "conversion value" over par a factor/concern? 2. I'm still struggling with how to pareto the critical factors to selecting full hedge situations. It looks like the keys are: a. Yield - first you want the highest ROI. b. Liquidity (does conv have consistent bid/ask data). Again if you have to close the hedge, you don't want to take a loss from a wide bid/ask spread because it's a thinly traded issue. c. Premium - affects ROI because of margin required, but you want it consistent over time (in case you have to close the hedge and you don't want the premium to be less than what you paid going in otherwise you lose money). I'm concerned that since there aren't too many really great full hedge candidates out there, you have to make concessions. How does your ranking method compare with the above? Sorry if I'm being redundant. Ted