Hive to HBD conversions were launched after latest HARDFORK where users are able to convert HIVE to HBD and sell it on external markets to take advantage of higher HBD prices. This not only helps to stabilize HBD value close to 1$ but also provides additional benefits like more liquidity to HBD on external markets and buying pressure on HIVE. To limit misuse, 5% fee is deducted on conversions.
HBD is only listed on two exchanges, Korean one (Upbit) and Bittrex. I had a bittrex account but it was suspended because of region I'm in. So selling HBD on external market to make profits is out of option. For last couple of weeks I have been converting HIVE to HBD and selling it on internal market (https://wallet.hive.blog/market) to make some profits. I didn't do enough math how much profit I was making but at least on initial look it seems I would be in some profit at least.
Today I just tried to check details how much HBD would I get for any specific amount of hive. Someone technical or expert can explain it in more detail and may be there are some posts as well. But simple thing is, whatever is the dollar amount of hive is, We get 50% (half) of it as HBD. 5% fees are taken, and HBD is rewarded instantly.
Amount of HBD = [(Amount of HIVE to be converted) x (Hive market price) x 0.95]/2
For example:
I have 164 HIVE and HIVE market price is 0.56 USD.
Amount of HBD paid should be:
164 x 0.56 x 0.95 / 2 = 43.624 Dollars (HBD)
164 x 0.497 x 0.95 / 2 = 38.716 HBD
So, it is taking 1 HIVE - 0.497 HBD = 0.57 USD (if HBD is at 1.15 USD)
= 0.596 USD (if HBD is at 1.2 USD)
Following are market prices of HIVE and HBD from coin gecko. I know they are not up-to-date and takes average of all markets.
Following is internal market exchange rates.
Now question is conversion is taking 1 HIVE = 0.497 $/HBD/USD (please correct me here with units). But it should take 1 HIVE = 0.56 USD or whatever the market price is.But it should take market price/feed by witnesses of HIVE and Take that as collateral to award HBD and then return remaining HIVE after 3.5 days, when HIVE price is finalized by median price.
I also read somewhere long ago, witness feed the price of HIVE in terms of HBD not the USD. I'm sure that system is correct and I'm not understanding it or missing some points here. It would be great to clarify, as it seems I was may be even or on loss may on conversions. Doesn't matter, But I want to learn how the system works.
Sorry for tags but 
-Khan