Big short squeeze, page-364

That's a good point - the convertible is long gamma and so if the owner is delta hedging, they will sell into rallies (strictly speaking, they will want to short into rallies as they are long Z1P via the embedded option). They will also buy/cover in the dips. The "problem" such as it is, is that the gamma is quite small up here in the 8s as the maximum conversion price is $5.5328, so the impact of gamma trading is limited. Obviously, they would want to sell/short to protect their credit exposure in the note if the company share price falls down below the lower strike and experiences financial distress, but that isn't realistic at this point.

Ideally, the convertible owner benefits most if the share price becomes highly volatile (they are long volatility), but their delta hedging activity serves to dampen volatility, so that means they can't really drive it.