Chinese Hedge

Chinese Hedge definition - finance
A hedge in which stock in a company is owned and a convertible bond in the same company is sold short, meaning that the seller does not own the sold bond. The hedge is undertaken on the belief that the premium on the convertible will fall. A typical hedge would be to short the stock and purchase the convertible. Also called reverse hedge.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.