convertible

Convertible refers to an object or instrument that can be transformed from one form into another. The term is used in several fields, most notably automotive design and finance, but also applies to some consumer goods. In each context, a convertible retains core functionality while adding flexibility or potential for future changes.

In automobiles, a convertible (also called a cabriolet or drop-top) is a passenger car with a roof that can be folded, retracted, or removed. Roofs are commonly fabric (soft top) or hard materials that fold electronically into the body. Modern convertibles use hydraulic or electric mechanisms for roof operation, and some models feature full metal roofs that fold or retract. The concept emerged in the early 20th century and became widely popular after World War II, evolving into a broad range of styles from sporty roadsters to luxury convertibles.

In finance, a convertible is a security that can be exchanged for a specified amount of another security, typically the issuer's common stock. The main forms are convertible bonds and convertible preferred stock. Key terms include conversion price or conversion ratio, maturity or redemption features, and any conversion premium or thresholds. Converts allow investors to benefit from potential equity upside while receiving fixed income; for issuers, they can reduce current borrowing costs at the expense of possible equity dilution if conversion occurs. If held through to maturity without conversion, the instrument behaves like a standard bond or preferred stock.

Outside finance and autos, the word is also used more broadly for items designed to be transformed or used in multiple ways, such as convertible furniture or 2-in-1 devices that switch between modes. The exact meaning depends on context and industry.