ConversionPremium the amount by which the priceof a convertiblesecurityexceedsthe currentmarketvalue of the common stockinto which it may be converted.
Because people wrongly view preferreds as less safe than bonds, the preferreds tend to have better yields and lower conversion premiums. (The conversionpremium is the amount by which the price of a convertible exceeds the value of the common stock you would get if you converted.) Another plus: They are exchange traded, so preferreds are more liquid.