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[Whitepaper] A Primer: Convertible Bonds and Convertible Bond Arbitrage

Convertible bond arbitrage, which has been in existence for decades, is a long-short strategy of buying a convertible security while simultaneously selling (shorting) a commensurate amount of that company’s stock to capitalize on the pricing inefficiencies present between the stock and the convertible bond. The strategy is a portfolio diversifier with low correlation to equities and bonds, and may work as a hedge against an inflationary environment—as it has lower sensitivity to rising interest rates.

The research team at LVW Advisors recently wrote a whitepaper below that explains convertible bonds and the convertible bond arbitrage strategy, including the potential benefits and risks of the strategy.

To further discuss convertible bonds and convertible bond arbitrage or if you have any questions, please contact your advisor or email info@lvwadvisors.com.

Download the LVW Advisors Whitepaper A Primer Convertible Bonds and Convertible Bond Arbitrage > 

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