Plz explain this part.
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The meaning of the above paragraph is that, Suppose a hedge fund manager finds a convertible bond which is underpriced as per his analysis and he bought that convertible bond. Now try to understand that convertible fund has a feature to convert it into companies equity shares at a certain price which reflects the feature of Buying a Call option (C+). Now since we have a long C+ that means we a have risk of share price falling. So in order to hedge ourselves from that, We short delta shares in cash market (that means part of shares).
Hence you see now over all position of hedge fund are convertible bond, C+ and Short delta shares. That’s what convertible fixed income arbitrage is.
I hope it helps.