You need to get convertible bond information quickly so you can invest in these securities. You're interested because you’ve read how corporations use them to raise capital for their operations or new ventures. Investors love them because convertible bonds give them fixed income, yet they offer the potential of growth in the same manner as stocks.

You want to learn the mechanics of convertible bonds, such as who issues these securities and why. You also want to understand how to model and price convertible bonds. Get convertible bond quotes education and training by doing the following:

1. Become proficient about convertible bond quotes through courses.

2. Understand quotes for convertible securities by attending seminars.

3. Become familiar with convertible bond listings by book resources acquired online.

Action Steps
The best contacts and resources to help you get it done

Learn about convertible bond quotes by taking courses

Taking courses enables you to learn about the traits and structure of the convertible bond. To be a successful investor, you must become knowledgeable about the convertible bond yield; you need to understand how interest rates affect the yield. Courses also teach you about the accounting and legal issues of convertibles bonds.

I recommend: New York Finance Institute offers comprehensive convertible bond quotes education and training. You’ll learn about the structure of convertible bonds, including their ratio, price, and period. CIFT Financial Training Solutions also provides complete convertible bond information. This course focuses on the fundamentals of convertible bond yields; you’ll learn what causes their prices to change.

Attend seminars to get solid convertible bond quotes education and training

Seminars can provide intensive information on convertible bonds. Understand who issues convertible bonds and why. Become knowledgeable with the strategies that hedge funds employ. If you're looking to invest internationally, keynote speakers can also teach you about Asian and European quotes for convertible bonds.

I recommend: University of Massachusetts Amherst has seminars on convertible bond pricing. Learn about the role that convertible bond arbitrageurs play in delivering capital to issuers. Understand the advantages and disadvantages of investing in convertible bonds through Super Class Computing. This website also educates you on how the brokerage house underwrites these securities.

Become proficient in convertible bond listings through books available online

Learn how corporations use convertible bonds to raise more capital for their operations. You can get in-depth information on modeling, including understanding the fundamental convertible bond model and taking advantage of equity warrant models to price convertible bonds. You will learn about other important information on convertible bonds, including their returns and distributions.

I recommend: Wiley has a book called Pricing Convertible Bonds that gives in-depth convertible information. You will become proficient in convertible bond modeling. Learn how to use equity warrant models to price quotes on convertible bonds. This book also discusses the complications associated with convertible bond modeling. The Investor’s Guide to Convertible Bonds also explains how convertible bonds work.

A convertible bond yields lower returns than the normal bond. The return reflects the fact that the company allows the customer to convert the bond into a specific number of shares. The convertible bond offers a fixed stock price and often reflects a much higher price than the market.

Convertible bonds are far less risky when used to manage portfolio risk than alternatives like the hedge fund. Unlike traditional bonds, the price goes up if the market rises. If the market drops interest rates usually do too and the interest return becomes important. They also bring in substantial gains if traded for that purpose. The use of quotes for convertible securities makes the trading easier.

You can:

1. Find convertible bond information either online or through special information created specifically for brokers.
2. Compare the convertible bond yield to others from similar companies with the same potential growth.
3. Sell early and take a capital gain with convertible bond quotes, if the market is conducive.
   

Action Steps
The best contacts and resources to help you get it done

Get a convertible bond quote from an online service

There are varieties of companies that give free quotes for your convertible bond. Many times traditional market quotes don't include updated information on the bonds, so it is important to find one that services that need. Online brokerage accounts often supply the needed information when you have an account with them.

I recommend: BondsOnline offers a quoting service for their customers. Many online brokerage accounts do not offer this type of specialized service. Another online brokerage that provides quotes on convertible bonds is optionsXpress, Inc.

Use a convertible bond quoting service that allows you to compare

In order to choose the best convertible bond for your client or your own brokerage account use a service that not only gives quotes but offers opportunities to compare it to other companies.

I recommend: BQuotes not only quotes the bond but keeps you linked to the underlying stock that backs the convertible bond. This company offers a multi-informational link for the busy broker. SciComp Inc. offers software to price not just convertible bonds, but also derivatives. The service is primarily for the back office.

Watch the price of convertible bonds for maximum return

Many brokerage accounts offer pricing and other information on convertible bonds. Brokers can call bond dealer or their back office or use a profession service to find bonds to recommend.

I recommend: Thomson Reuters offers a multitude of information for pricing convertible bonds, both for the professional broker and individual. Zions Direct, a subsidiary of Zion Bank, offers free quoting service for their clients.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Brokers should contact their back office to find the best tracking service. Individuals need to find out if their brokers offer online services that give free convertible bond quotes.

A convertible bond is one that can be converted into stock at a company. It has both equity and debt-like qualities. Holders like them because they can convert the bond to common stock usually at a discount. Another feature is that they yield lower returns than a normal bond. When they are included in a portfolio, they are less risky than hedge funds. There are quite a few online services that provide convertible quotes where you can compare prices. If you decide you want to invest in these types of bonds it would be helpful to understand some of the terms you might run across as you explore them.

Action Steps
The best contacts and resources to help you get it done

Multiple option strategy

A multiple option strategy is a plan for using securities so that risk is spread across stocks, bonds or markets. Multiple option strategies are often used by convertible bond traders.

I recommend: For an in depth description of these strategies you can find one at Scribd. For methods on evaluating a multiple option strategy go to Hoadley Trading and Investment Tools.

Spread trade

When spread trading, convertible bond investors buy one security and sell another related one in the hopes of profiting from the change in price difference that might occur.

I recommend: For more information on how to do spread trades go to Street Authority.

Algorithmic trading

Algorithmic trading is also referred to as robo trading, automated trading or algo trading. It is a computer program that allows for the entering of orders with the computer algorithm determining things such as the quantity, price or timing of the order.

I recommend: Find a definition of algorithmic trading at Automated Trader. For more in-depth discussion on this type of trading go to Waters.

Baby bond

A bond that is issued with a par or nominal dollar amount of less than $1,000. Convertible bond investors find these types of bonds attractive because they are so affordable. They might be a good investment for a new trader or small investor.

I recommend: For a more complete definition go to Investopedia.

Basis points

A basis point is used to convey point changes of less than 1%. Convertible bond investors know that basis points are used to indicate a rate change in a security.

I recommend: For a more descriptive definition you can find one at RupeeTimes.com.

LIBOR

LIBOR stands for London Interbank Offered Rate, and is a daily rate that is based on the interest rates that banks pay to borrow unsecured funds from other banks in the London markets. It is similar to the U.S Federal funds rate. Convertible bond investors know that it is a common benchmark that is often compared to bond buyers indexes.

I recommend: To see a comparison of LIBOR to other interest rate indexes check out Bankrate.