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November 2008



How to make money in today's economy with arbitrage!!!!

November 11, 2008 – Comments (0)

Ok most of you know how to make money in arbitrage already using convertable bonds, but if you don't I would suggest reading a good investment book before trying my advice. Typically abitrage using converts is trying to pick a convert that you think will go up in stock price and taking advantage of the conversion ratio. ie.... ABC stock is selling for $20 and the $1000 5% bond has a conversion ratio of 50:1. When the stock price goes to $25, you immediately convert the bond to stock and sell the stock for $1250. A good way to make a quick 12.5 percent profit with the only downside being the %5 or so your gonna make off the bond if you don't convert, but picking this type of stock in this market is hard if not impossible.  [more]

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