MBRM Launches Option on Convertible Bonds Feature

MB Risk Management haveintroducedthe new ability to price and risk manage Options on Convertibles, to their Universal Convertibles Add-in. This gives the ability to buy and sell Options on Convertibles where the strike is quoted as fixed credit spread (analogous to how options can be used to hedge equity portfolios). The option on convertibles therefore gives the holder a hedge against the credit spread of the issuer changing (which may be essential if the holder has a portfolio of bonds from that same issuer which would be negatively affected by any increase in credit spread).


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