Convertible Preferred Stock

If you’re an ordinary retail investor, you probably just have access to common stock. Congratulations, pleb. The world will now go back to crushing you under a boot.

But when you’re a VIP investor, you get better options. Much better options. In the case of stock buying, that wealthy investor might get access to convertible preferred stock. This is preferred stock that can be converted into a set number of common stock in the future.

Why, you ask? Because there's an option for the investor to do so.

If the common stock price rallies higher, that option may allow the holder of the preferred stock to make more money by converting those shares.