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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 MatchesArbitrage Trading Program (ATP)Arbitrage Trading Program (ATP)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. 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. One-way arbitrageOne-way arbitrageThe use, by a potential supplier or demander in a market, of a different market or markets to accomplish the same purpose, taking advantage of a discrepancy among their prices. With transaction costs, this enforces smaller price discrepancies than would be permited by conventional arbitrage. Due to Deardorff (1979). Reversal ArbitrageReversal ArbitrageA riskless arbitrage that involves selling the stock short, writing a put, and buying a call. The options have the same terms. Further SuggestionsCurrency arbitrageStructured arbitrage transaction Riskless arbitrage Multiple Arbitrage Triangular arbitrage Triangular arbitrage Tax arbitrage Index arbitrage conversion arbitrage Covered interest arbitrage arbitrage Arbitrageur Special arbitrage account International arbitrage arbitrageur Locational arbitrage Arbitrage Convertible Arbitrage Arbitrage bonds Arbitrage free option pricing models Risk controlled arbitrage |
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