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Currency arbitrage |
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Currency arbitrageTaking advantage of divergences in exchange rates in different money markets by buying a currency in one market and selling it in another market.Currency arbitrage Similar MatchesDiscount ArbitrageDiscount ArbitrageA riskless arbitrage in which a discount option is purchased and an opposite position is taken in the underlying security. The arbitrageur may either buy a call at a discount and simultaneously sell the underlying security (basic call arbitrage) or maybuy a put at a discount and simultaneously buy the underlying security (basic put arbitrage). See also Discount. Index arbitrageIndex arbitrageAn investment/trading strategy that exploits divergences between actual and theoretical futures prices. An example is the simultaneous buying (selling) of stock index futures (i.e., S&P 500) while selling (buying) the underlying stocks of that index, capturing as profit the temporarily inflated basis between these two baskets. Often, the point at which profitability exists is expressed at the block call as the number of points the future must be over or under the underlying basket for an arbitrage opportunity to exist. See: Program trading. Covered interest arbitrageCovered interest arbitrageOccurs when a portfolio manager invests dollars in an instrument denominated in a foreign currency and hedges the resulting foreign exchange risk by selling the proceeds of the investment forward for dollars. ArbitrageurArbitrageurA person or firm carrying out arbitrage. Tax arbitrageTax arbitrageTrading that takes advantage of a difference in tax rates or tax systems as the basis for profit. Further SuggestionsSpecial arbitrage accountTriangular arbitrage arbitrage Convertible Arbitrage Locational arbitrage Riskless arbitrage Covered interest arbitrage Reversal Arbitrage Arbitrage free option pricing models conversion arbitrage International arbitrage Risk controlled arbitrage Arbitrage Trading Program (ATP) Arbitrageur Arbitrage bonds Arbitrage One-way arbitrage Multiple Arbitrage Triangular arbitrage Structured arbitrage transaction Merger Arbitrage |
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