Convertible Bonds – Andrew Loo – CFI Education

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Exploring the Essential Features of “Convertible Bonds – Andrew Loo – CFI Education”

Enroll for a comprehensive overview of convertible bonds—a specialty area within capital markets that requires unique analysis and trading strategies.

• Understand the mechanics of convertible bonds
• Learn the unique math surrounding these instruments and their risk metrics
• Explore some of the common trading strategies of CBs

Overview

Convertible Bonds Course Overview

This course provides a comprehensive overview of convertible bonds. Students will learn convertible bonds’ benefits, risks, types, and issue processes. In addition, valuation methods will be discussed, including an Excel example for students to apply their learning.

Convertible Bonds Learning Objectives

By the end of this course, you will be able to:

• Understand what convertible bonds (CBs) are and their various structures
• Identify the buyers of CBs, as well as the benefits and risks of investing in CBs
• Comprehend the math of CBs and understand various Greeks
• Appreciate some methods used to trade CBs for arbitrage, hedging, and indexing

Who should take this course?

This Convertible Bonds course is perfect for students interested in learning about the fundamentals of convertible bonds. This course is essential for students pursuing a career in the capital markets since convertible bonds are a necessary type of convertible security issued by many firms and institutions.  

What you’ll learn

Convertible Bond Basics
Course Introduction 
Downloadable Files
Convertible Bonds Overview 
Convertible Bond vs. Straight Bond 
Convertible Bond Refinitiv Workspace Example 
Conversion Price and Conversion Ratio
Parity Value
Interactive Exercise 1
CB Value Diagram
CB vs. Share Price
Low, Medium, and High Premium
Interactive Exercise 2
CB Redemption
Types of CBs
Who Issues CBs and Why
The CB Market
Bank Capital
Interactive Exercise 3
CB Benefits
Who Invests in CBs and Why
Risks of CBs
How Are CBs Issued
Interactive Exercise 4
Midway Check-in

The Math of Convertible Bonds
Analyzing CBs Example
Analyzing CBs Example – Conversion Price and Conversion Ratio
Analyzing CBs Example – Parity and Conversion Premium
Analyzing CBs Example -Investment Value and Investment Premium
Analyzing CBs Example -Current Yield and Yield Advantage
Analyzing CBs Example – Break-Even Period and Break-Even Cash Flow

Trading Strategies
Bond Value Inputs and Option Value Inputs
Implied Volatility and Historical Volatility
How Options Are Priced
Delta and Gamma
Option Intrinsic and Extrinsic Values
Theta and Vega
Rho, Omicron, and Phi
Greek and BC Valuation Example
Interactive Exercise 5
Trading CBs
CB Indexes
CB Trading Strategy – Asset Swap
CB Trading Strategy – Arbitrage
Interactive Exercise 6
Course Summary

Qualified Assessment
Qualified Assessment

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