Can new bonds be freely traded like stocks after listing? Can convertible bonds make money by converting shares?

The differences between convertible bonds and stocks in earning power mainly lie in the following aspects:

Create new ways to make money

When we apply for new bonds, we do not need the market value of the bottom position, nor do we need funds in the early stage. Three days later, if you win, you will add money to the stock account and pay according to the winning lot. Then wait for half a month or one month, the new bonds will be listed for trading, and there will be a 10% - 30% premium on the day of listing. We can make money by selling them directly. If we are optimistic about the trend of positive shares, we can also hold them for a long time. However, there is a market value requirement for new shares, and the winning rate of new shares is lower than that of new bonds. In addition, new shares may break, but new debts will not.

Trading to make money

After the new bonds are listed, they can be bought and sold freely like stocks, but convertible bonds are T+0 transactions, that is, they can be sold on the same day when they are bought, and there is no limit to the number of times. Stocks are T+1 transactions, obviously less flexible than convertible bonds.

Convertible bonds, like stocks, can make money by buying at a low price and selling at a high price. There is no limit on the price of convertible bonds, which can rise indefinitely in theory. But in fact, if you can buy them at a price below 100 yuan, you can also have the face value of bonds and interest income to guarantee the minimum. The stock has a limit on the rise and fall, but in the long run, it can also go up and down indefinitely. All, the risk of convertible bonds is relatively lower.

Make money by converting shares

Convertible bonds can make money by converting shares, but stocks cannot. During the conversion period, convertible bonds can be converted into shares at a certain conversion price. If the income from holding company shares is greater than the income from holding convertible bonds, we can convert it into shares. Especially when the market is good, the stock price will rise significantly, and the convertible bond conversion price is unchanged, so we can convert convertible bonds into higher priced stocks, and then sell stocks for profit.

Make money by redemption at maturity

Under special circumstances, if the price of regular shares continues to fall, the convertible bonds will also fall. If the price of the convertible bonds has fallen below 100 yuan and the mandatory redemption period is coming, then we can hold the convertible bonds until they are due, and the company will repay our principal and interest. Although it may only have an annualized yield of about 2%, it is acceptable to suffer a large loss compared with the stock decline.

In addition, convertible bonds have lower interest income, while stocks have dividends; There is no stamp duty on convertible bond transactions, and 0.1% stamp duty will be charged on the sale of shares; The commission on convertible bonds is also much lower than the stock commission.

These are the differences between convertible bonds and stocks. I hope they can help you.

key word: Convertible bond shares Earning power