A convertible that is in the money, i.e., it has its actual share price above the conversion price. As share prices increase, a convertible tends to be more sensitive to its equity component and less sensitive to interest rates because its parity value will consequently increase, whilst its fixed income value remains unchanged. Therefore, from the viewpoint of an investor using convertibles as an alternative to straight bonds, in-the-money (ITM) convertibles involve greater level of risk than out-of-the-money (OTM) convertibles.