An Introduction to Hybrid Securities

Financial Securities in Strategic Financial Management

An Introduction to Hybrid Securities

What you’ll learn

  • Explains Hybrid Securities and Financial Derivatives.
  • Explains Deep Discount Bonds.
  • Explains Options Contract.
  • Explains Preference Share Capital.

Course Content

  • Introduction –> 2 lectures • 15min.
  • Securities and Derivatives –> 3 lectures • 25min.

An Introduction to Hybrid Securities


An Introduction to Hybrid Securities

This course gives an introduction to Hybrid Securities, a section in Financial Securities that is part of the subject, Strategic Financial Management.

Here we introduce Deep Discount Bonds, Options Contract, and Preference Share Capital.

In Deep Discount Bonds, we familiarize ourselves with the concepts and perspectives behind Deep Discount Bond or Junk Bonds.

In Options Contract, we answer the following questions that may be,

(1) What are Options?

(2) What are the different types of Options?

(3) What is a Premium of an Options Contract?

(4) What is the Strike Price of an Options Contract?

We also illustrate the Options Contract with an example and discuss underlying assets in Exchange Traded Options, including, Stock, Foreign Currency Options, Index Options, Futures Options, and Interest Rate Options.

In Preference Share Capital, we answer the following questions,

(1) What is Preference Share Capital? and

(2) What is the distribution of Assets and distribution of Earnings in Preference Share Capital?

In this section, we also discuss the definitions of Preference Share Capital and the legal terms behind it. Our discussion also runs around what may happen to Preference Share Capital in the event of the Liquidation of a Company.

Voting Rights are discussed next, for Preference Share Holders and subtle points are discussed around the Redemption of Preference Shares.

As part of Hybrid Securities, we may also include Convertible Debentures and Warrants in a later session.

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