Convertible Security

In a nonreligious sense, changes over - - or convertible securities - - are typically debt bonds or preferred stock that proselyte into the common stock of a responsible company. One method for buying something and end up with something different.

Features

• Companies that issue convertible securities will frequently utilize call features to keep up with some control of the investment.
• The performance of convertible securities can be vigorously impacted by the underlying stock's price. Compared to investment options that don't have a conversion feature, convertible securities will more often than not have a lower payout.
• A convertible security can be changed over from one asset type into another, for example, a convertible bond that might be changed over into common stock.
• The value of the conversion feature of a convertible security is like the value of a stock's call option.