Are preferred stocks more or less risky than convertible preferred stock?

When you buy and sell preferred stocks, does it affect the common stock price?

• Or when you buy preferred stocks, for example at 25 dollars a share, does the price increase a little, and when you sell it, does it decrease a little, in other words do you affect any price (common or preferred price i mean) of the shares. If no, how the price of preferred stocks is determined?

• Answer:

  Preferred prices like the price of all securities depend on supply and demand. With preferreds it's relatively easy to price them because you are just pricing a credit-risky perpetuity. You assess the credit risk of the preferred and price it accordingly. I have never heard that action trading preferreds influences the price of the common directly. I can make up some story like, preferred goes up indicates that people think the company is more creditworthy so the common responds using the preferred as a leading indicator, but I don't believe it. They will certainly be correlated but this is about good/bad news affecting both creditworthiness and equity value simultaneously.