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In March, along with the sharp fluctuations in the global capital market caused by crude oil prices and panic epidemics, the domestic convertible bond market also experienced large fluctuations.

Due to the T 0 trading mechanism of the convertible bond products and the loosening of the restrictions on the rise and fall, and the overall liquidity in March is sufficient, affected by the day-to-day emotional game of the equity market, the logic of the rise and fall of some popular convertible bonds has deviated from the trend of the stock value The range and turnover rate are abnormal.

Write ahead and hit market data

As the name implies, convertible bonds are simply bonds that can be converted into stocks within a certain period according to the agreed conditions and ratio.

Investors can hold to maturity, obtain principal and interest, or convert bonds into ordinary stocks within the conversion period according to the conversion price or conversion ratio agreed upon at the time of issuance. Of course, investors can also trade directly in the circulation market to earn capital gains.

It should also be noted that convertible bonds may also be provided with conversion price correction clauses, redemption clauses and resale clauses. These clauses will give issuers or investors the right to control their own risks and protect their own interests according to the specific market conditions.

The market interprets the possible causes of severe volatility

So what are the possible reasons for the dramatic fluctuations in this round of convertible bond market? Hippo also absorbed the opinions of some brokerage analysts and financial media colleagues. To summarize briefly, there may be three reasons:

First, the recent stock market volatility is superimposed on the conversion bond trading mechanism and product characteristics, which amplifies the greedy speculation or panic of investors chasing up and down. It is not difficult to find out from the time when the transaction volume and the rise and fall of the above began to change, and doubled after the holiday.

Second, there are abnormal trading behaviors in the market that affect the normal trading order and mislead investors' trading decisions, that is, there may be speculation components such as hot money and other risk appetite, and high-frequency and flexible small and medium-sized funds.

The third is from the perspective of behavioral finance. In the face of fierce market conditions, investors are prone to herding effects and overconfidence.

In the face of the market's short-term obvious increase, hot money or retail investors will abandon the fundamental value investment concept and the "positive stock driven" investment idea of convertible bond products. Even if investors find that the convertible bond market has left the trend of the stock market, they still choose to believe that they are not the last one.

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