Convertible Arbitrage

Beschreibung

Investment professionals familiar with convertible arbitrage techniques recognize the strategy as a rock-solid tool for generating significant returns regardless of market movements. It's no surprise, then, that amidst the backdrop of market volatility and investor uncertainty, the field of convertible arbitrage keeps growing. Since 1993, the convertible arbitrage market has grown at an astounding 45% compound annual growth rate through the first half of 2002 to $24 billion.* In Convertible Arbitrage: Insights and Techniques for Successful Hedging, renowned investment expert Nick P. Calamos shows you ways to make the most of convertible arbitrage, explaining how to boost returns while decreasing risk-no matter what the market is doing. The practice of convertible arbitrage takes advantage of the unique hybrid nature of convertible securities, which combine both fixed-income and equity characteristics. It typically involves matching a long position in convertible securities-usually convertible bonds-with a short position of corresponding stock. The bond pays interest and guarantees a yield upon maturity-but you also can participate in the movement of the underlying stock because a convertible bond's option component makes it readily convertible into stock. Convertible arbitrage thus allows investors to create positions that achieve either market-neutral returns or that have a bias towards a security's future price, offering tools to both the defensive and aggressive investor. This not-to-be-missed guide gives you: * A top-to-bottom overview of convertible arbitrage-its history, how it works, and why it is especially useful in a volatile market * In-depth coverage of convertible valuation models and the "greeks," the statistical qualifications of convertible functions * Reasons why the credit and business valuation of a convertible can make or break your hedge position * A thorough review of convertible arbitrage techniques-from delta hedges and convertible option hedge techniques to swaps and nontraditional hedges * An insider's guide to portfolio risk management, including tips on portfolio evaluation, risk analysis, and optimization The array of convertible securities available-and the ever-shifting financial engineering behind them-demands a practical working knowledge of convertible arbitrage hedging techniques. Not only does Convertible Arbitrage put those techniques at your fingertips, it also helps you use those techniques to prepare for-and profit from-new twists in convertible terms, types of securities, or derivative hedge products. *Tremont Advisers, Inc. "The Calamos Convertible Fund offers the Holy Grail in investing-a long-term return superior to the index with less volatility." -William Harding, Analyst Morningstar Investment Services
Minimize risk and maximize profits with convertible arbitrage Convertible arbitrage involves purchasing a portfolio of convertible securities-generally convertible bonds-and hedging a portion of the equity risk by selling short the underlying common stock. This increasingly popular strategy, which is especially useful during times of market volatility, allows individuals to increase their returns while decreasing their risks. Convertible Arbitrage offers a thorough explanation of this unique investment strategy. Filled with in-depth insights from an expert in the field, this comprehensive guide explores a wide range of convertible topics. Readers will be introduced to a variety of models for convertible analysis, "the Greeks," as well as the full range of hedges, including titled and leveraged hedges, as well as swaps, nontraditional hedges, and option hedging. They will also gain a firm understanding of alternative convertible structures, the use of foreign convertibles in hedging, risk management at the portfolio level, and trading and hedging risks. Convertible Arbitrage eliminates any confusion by clearly differentiating convertible arbitrage strategy from other hedging techniques such as long-short equity, merger and acquisition arbitrage, and fixed-income arbitrage. Nick Calamos (Naperville, IL) oversees research and portfolio management for Calamos Asset Management, Inc. Since 1983 his experience has centered on convertible securities investment. He received his undergraduate degree in economics from Southern Illinois University and an MS in finance from Northern Illinois University.

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Nick P. Calamos

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".filled with in-depth insights and a wide range of convertible topics, provides a thorough explanation." (Financial World, January 2004)
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".filled with in-depth insights and a wide range of convertible topics, provides a thorough explanation." (Financial World, January 2004)
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