What are convertible bonds?

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Updated
Feb 2024

Convertible bonds (issued by corporations) are a type of hybrid security that offer interest payments just like regular bonds, while also giving you the option to convert it to the underlying stock.

Convertible bonds can be traded in for a predetermined amount of the common stock of the issuing company, although provisions generally restrict when a conversion can take place.

What else do you need to know about bonds?

Want to learn more before deciding what’s your optimal bond allocation? You might want to check out these other articles to deepen your knowledge.

 

 

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Balázs Szládek
Author of this article
I have 20+ years of hands-on experience as a business journalist, researcher, copy editor and translator covering topics including general news, economic policy, politics and energy markets. I enjoy the challenge of explaining difficult subjects in plain English, helping would-be investors navigate the field of financial markets. I hold a master's degree in American Studies and Political Science.
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