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Discount Arbitrage |
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Discount 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.Discount Arbitrage Similar MatchesCovered interest arbitrageCovered interest arbitrageA combination of transactions on two countries' securities and exchange markets designed to profit from failure of covered interest parity. A typical set of transactions would include selling bonds in one market, using the proceeds to buy spot foreign currency and foreign bonds, and selling forward the return at a future date. See also one-way arbitrage. Merger ArbitrageMerger ArbitrageIn the context of hedge funds, a style of management that involves the simultaneous purchase of stock in a company being acquired and the sale of stock in its acquirer. Structured arbitrage transactionStructured arbitrage transactionA self-funding, self-hedged series of transactions that usually use mortgage-backed securities (MBS) as the primary assets. Risk controlled arbitrageRisk controlled arbitrageA self-funding, self-hedged series of transactions that generally use mortgage securities (MBS) as the primary assets. Locational arbitrageLocational arbitrageAttempt to exploit discrepancies in exchange rates between banks. Further SuggestionsConvertible ArbitrageRiskless arbitrage One-way arbitrage Triangular arbitrage Tax arbitrage Triangular arbitrage arbitrageur Covered interest arbitrage conversion arbitrage Multiple Arbitrage Arbitrage arbitrage International arbitrage Currency arbitrage Arbitrageur Index arbitrage Arbitrage bonds Reversal Arbitrage Arbitrage Trading Program (ATP) Arbitrage free option pricing models Special arbitrage account |
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