Simply calculated, 100,000 principal, loss of 50%, becomes 50,000; To return on investment, the yield needs to reach 100%.
If your position is cut in half, you don't know if it will go further, if it will be in the future, or when.
These are uncertainties, and when your investments are filled with too much uncertainty, you are getting farther and farther away from capital preservation, let alone compound interest.
At this time, the advantages of convertible bonds are highlighted, which is determined by the essence.
If you hold convertible bonds, the listed company needs to repay the principal and interest, which is their obligation and our way back.
If the convertible bond you hold is falling endlessly, there may be a chance for you to cover your position, because there is some certainty here:
Because of the existence of the debt base, it will not be endless**.
If the company's share price has been **, a buyback clause may be triggered, and you can exercise the right to sell back, which is a protection clause for investors.
In order to avoid downward revision or even resale, listed companies will find ways to pull up the stock price, which in turn will drive the ** of convertible bonds.
Convertible bonds have a maturity and if the issuer wants it to be delisted by way of forced redemption, at least before maturity, the price must reach a level where the forced redemption clause can be triggered.
If it is finally delisted at maturity, the listed company must repay the principal and interest.
When it comes to the king of A-share stocks, many people think of Kweichow Moutai, which has risen more than 300 times since its listing, reaching about 2,600 yuan. When it comes to convertible bonds, many people's reaction may be, what is the king of bonds? What kind of king can be turned?
The delisted Yingke convertible bonds have a historical high of 3618188 yuan, which is 1,000 yuan higher than the history of Gui Moumao.
The reason why INTCO convertible bonds can have such a trend is inseparable from the underlying stock INTCO Medical behind it. INTCO Medical's main business is to make high-quality personal protective products, and the revenue of this business accounts for about 90% of the total revenue, and we know that at the end of 2019, medical gloves, medical masks, these protective equipment are in short supply, making INTCO Medical's stock price all the way.
In addition, there are many other convertible bonds that have risen to hundreds of yuan or even thousands of yuan, and among the 302 convertible bonds that have been delisted, more than 90% of the convertible bonds are delisted by forced redemption, and the highest price of more than 98% of the convertible bonds exceeds 130 yuan, and the highest price of about 85% of the convertible bonds exceeds 150 yuan.
The road to simplicity,With 100 yuan of *** convertible bonds, hold to 130 yuan and sell, you can get 30% of the return, of course, you can sell at a lower *** with a higher ** to get a higher return.
Is this risky? Yes! However, by excluding convertible bonds with ST and convertible bonds with a rating below A, these bonds can be avoided and the risk will be reduced a lot.
Of course, this is the simplest and most basic strategy, and if you are not satisfied with this, there will be many other strategies to share in the future.
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