Home > Glossary > Equity Commitment Note
Equity Commitment Note
Categories: Stocks,
A type of mandatory convertible which can be exchanged for common stock once the security reaches maturity. The holder of the equity commitment note is not required to purchase the equity, unlike an equity contract note, and instead requires the note issuer to exchange the note for a future equity issue.
Featured term of the day
Definition / Meaning of
Convertible Hedge
Categories: Strategies,
When you use a convertible hedge, you buy a convertible bond, which you can exchange under certain circumstances for shares of the company's common stock. At the same time, you sell short the common stock of the same company. As in any hedge, your goal is to make more money on one of the transactions than you lose on the other. For example, if the price of the stock falls, you're in a position to make money on the short sale while at the same time knowing that the convertible bond will continue to be at least as valuable as other bonds the company has issued. On the other hand, if the stock gains value, you hope to be able to realize more profit from either selling the convertible or exchanging it for shares you can sell than it costs you to have borrowed and repaid the shares you sold short.There are no guarantees this strategy or any other hedging strategy will work, especially for an individual investor who faces the challenge of identifying an appropriate security to hedge and the appropriate time to act.
Most popular terms
1. Rating Bureau2. Long-term Care Insurance
3. Self-insured Retention (SIR)
4. IRA Rollover
5. Employee Retirement Income Security Act Section 404(c)
6. Common Shares
7. Hand
8. Earnings Before Interest, Taxes, Depreciation And Amortization
9. Floating Excess Policy
10. Expiration Cycle
Search a term
Browse by alphabet
A | B | C | D | E | F | G |
H | I | J | K | L | M | N |
O | P | Q | R | S | T | U |
V | W | X | Y | Z | # |
Browse by category
AccountingBanking
Bankruptcy Assistance
Bonds and Treasuries
Brokerages
Business and Management
Compliance and Governance
Credit and Debt
E-commerce
Economics
Estate Planning
Forex
Fraud
Fundamental Analysis
Futures
Global
Insurance
International Trade
Investing and Trading
Ipos
Legal
Loan and Mortgage
Mergers and Acquisitions
Mutual Funds
Operation and Production
Options
Patent
Personnel Management
Real Estate
Retirement and Pension
Statistics and Risk Management
Stocks
Strategies
Tax
Technical Analysis
Venture Capital