Convertibles quiet amid stock volatility; Whiting wavers after January presentation

By Rebecca Melvin

New York, Jan. 4 – Convertibles trading was light on Monday and little changed amid outsized volatility in the broader markets and sharply lower equities on the heels of a big sell-off in Asia stocks.

There were also concerns over the geopolitical situation in the Middle East after Saudi Arabia broke off diplomatic relations with Iran.

“It was an inactive day compared to how everything else was trading,” a New York-based convertibles trader said, contrasting the convertibles market with the broader markets.

“There was only $190 million of bonds on the tape, so it was still a small day and not very active,” he said.

But he added that convertibles players were relieved to see a late rally in the “general markets,” and that “It will be interesting to see how the market responds when everyone gets back from the holidays and things get going in earnest.”

The S&P 500 stock index came back from a nearly 5% drop to 1,989.68 early Monday, ending the session down a less dramatic 31.28 points, or 1.5%, at 2,012.66. The Dow Jones industrial average also pared early losses, to finish down 276.09 points, or 1.6%, to 17,148.94.

Elsewhere, Iconix Brand Group Inc.’s 2.5% convertibles due in June were offered down at 88, a New York-based convertibles trader said. The bonds were 89.5 to 90 on Dec. 31 and traded in the low 90s in mid-December.

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