A convertible selling off the stock is merely a phrase that indicates that theconvertible price is now directly affected by movements in the underlying commonshare.example: $100 convertible debenture can be converted into 2 common shares. thecurrent common share price is $35.since the convertible debenture buys you shares that theoretically costs you $50 each,and the common share is currently only $35, the convertible debenture wont beaffected much by the stock price.but consider what happens if the stock price is now $60 per share in the market. yourconvertible bond buys you two shares that cost you $50 even though each share isnow worth $60. you would expect the convertible debenture to be worth at least $120,up from its original price of $100. and what happens if the stock rises in price from $60to $65 the following day? the convertible should rise in price to at least $130. themovement of the convertible price as a direct result of the movement of the commonshare price is called selling off the stock. the selling price of the convertible in thiscase is based on what the common share price is doing.
