Today, I’m going to write you a project with poor information. This project is a controversial one!
The nature of the dispute is mainly divided into two points:
First: convertible bonds are similar to stocks
I believe that when it comes to stocks, many people think that 90% will lose money!
Convertible bonds belong to 99% will not lose money, 99% will make money a small project!
Second: convertible bonds are like lotteries
When it comes to the lottery, many people think that the winning rate is too low. Also need to spend money to buy, not cost-effective!
Convertible bonds, like lottery tickets. Lottery win money to earn, convertible bonds, 99% money to earn!
Convertible bonds do not require you to spend money to buy, equivalent to zero cost, almost no risk!
Note: This article is for sharing only, without any interest relationship. If you don’t think it’s true, just close the article.
The following is a detailed introduction
Hit new debt project
Understand what a convertible bond is:
The full name of convertible bond is “convertible corporate bond”. Its essence is a bond issued by listed companies. As a bond, its face value is 100 dollars at the present stage, and the maturity of the bond is generally 5-6 years.
Investors holding such bonds have the right to convert their bonds into the stocks of the corresponding listed companies. The agreed conversion price is called “conversion price”, while the price of the stocks themselves is called “positive share price”.
When a bond is converted into stock, the creditor becomes the shareholder of the listed company, and during the 15-year bull market, there were a lot of convertible bonds, and the yield doubled, 1,000 to 2,000, 2,000 to 4,000,
This is called uncapped.
After all, bull markets are not long lasting, and they have not happened many times. Like last year’s bull – or – bull, bear – or – bear stock market can have a return of about 30 percent, also considered very good.
If the stock is in bad condition and the “positive share price” continues to decline, the investor has the right to “sell back” the company’s stock at a price not less than its face value plus interest if the closing price of the company’s stock is less than 70% of the current conversion price for any thirty consecutive trading days.
Or, instead of selling to the company, you can hold the convertible bond to maturity until you get the principal and interest back (which is a pittance), provided the price is right at the time.
This is called a safety net.
In a nutshell:
It’s the profit you make when the price of your convertible bond goes up. It’s yours. When you have a loss on a convertible bond. Convertible bond maturity, the company will buy back your hands convertible bond ticket!
How to operate new debt?
1. The threshold for new debt
The basic requirement is to open a stock account, or open one if you don’t have one. (Account opening is free)
In a word, there is basically no threshold for anyone to make a new debt. It is recommended to leave about 5000-10000 idle funds, if hit, do not worry about no spare money to pay.
2, play new debt after how to operate?
If you are lucky enough to win, should you sell or hold on the day of listing? This is based on investors’ psychological expectations of earnings.
As I mentioned at the beginning of this article, many convertible bonds rose to 20%-30% on the first day of listing, which is already a high yield. If the yield has met your expectations, you will be safe in your pocket.
If you still have a good view of it in the future, you can hold on to it and sell it at the price you want.
Specific operation steps:
The first step is to open the brokerage APP and click the home page to issue new shares — new debt subscription
If there is no new bond issue today, you can click to view the new bond issue plan and set a new bond issue reminder.
The second step, if there is a new debt issued, click immediately purchase, the page will let you enter the number of purchase, if you have confidence in this new debt, it is recommended to point the maximum purchase is the number of purchase ceiling. After filling in the quantity, click OK.
Have a friend worried about the purchase, if in, can not take out so much money how to make bubble net. In fact, the maximum purchase can only be 10-30, each face value of 100 dollars, that is, the need to prepare 1000-3000 dollars of cash.
The maximum purchase will only improve the probability of signing, if you have about 5000 idle funds, do not worry about not enough money to invest.
If you want more, you can consider using all your family members’ ID cards and opening several accounts together.
The third step is to select “Apply immediately” after filling in all the requested quantities.
The fourth step, select “confirm purchase”.
Just like that, the new process is over!
The next step is to wait for the successful signing, which usually takes 2 working days. After the successful signing, the system will inform you how much money to transfer to the securities account, and then the system will freeze the funds until the convertible bonds are listed. If successful, timely payment, waiting for the listing, generally to wait for 2 weeks -1 month.
The risk of what might happen
Convertible bond itself is a bond, bond is a low risk product, generally as long as the company does not go bankrupt, hold the bond maturity, can get back the principal interest.
Of course, in addition to corporate bankruptcy (which is generally very unlikely), there are some possible risks to mention:
1. Forced redemption
Convertible bonds have a redemption clause, which states that the issuer can forcibly redeem the bond after a certain period of time, which is not a bad thing.
But once it happens, investors need to swap shares or sell them as soon as possible, otherwise there may be some interest losses.
2, break/price drop
If the newly issued convertible bonds of the listed company fall after the listing, for example, the convertible bonds of 100 dollars/sheet fall to 95 dollars/sheet after the listing, it may lead to panic and bubble profits for investors, and they may lose patience if they keep falling.
At this time, it is necessary to have a very good attitude. As long as you stay patient, the price will always come back, but the time of return is uncertain. If the price never goes up, you can get the principal plus interest as long as you hold it to maturity. For investors, it is the time and interest that are lost rather than the principal.