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One-way arbitrage |
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One-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).Similar MatchesArbitrage bondsArbitrage bondsMunicipality issued bonds issued intended to gain an interest rate advantage by refunding a higher-rate bond in ahead of their call date. Lower-rate refunding issue proceeds are invested in Treasuries until the first call date of the higher-rate issue. 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. Tax arbitrageTax arbitrageTrading that takes advantage of a difference in tax rates or tax systems as the basis for profit. Riskless arbitrageRiskless arbitrageThe simultaneous purchase and sale of the same asset to yield a profit. Arbitrage free option pricing modelsArbitrage free option pricing modelsYield curve option-pricing models. Further SuggestionsReversal Arbitragearbitrage Arbitrage Trading Program (ATP) Triangular arbitrage Discount Arbitrage arbitrageur Arbitrage Triangular arbitrage Structured arbitrage transaction conversion arbitrage Covered interest arbitrage Arbitrageur Convertible Arbitrage International arbitrage Merger Arbitrage Locational arbitrage Currency arbitrage Covered interest arbitrage Risk controlled arbitrage Special arbitrage account Multiple Arbitrage |
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