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Reversal Arbitrage |
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Reversal ArbitrageA riskless arbitrage that involves selling the stock short, writing a put, and buying a call. The options have the same terms.Reversal Arbitrage Similar MatchesRiskless arbitrageRiskless arbitrageThe simultaneous purchase and sale of the same asset to yield a profit. Discount 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. Arbitrage 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. ArbitrageArbitrageThe simultaneous purchase and sale of two different, but closely related, securities to take advantage of a disparity in their prices. Alternatively, the purchase and sale of the same security in different markets.Originally, most arbitrage occurred in the currency markets: arbitrageurs would buy in one market and sell in another. Nowadays, the practice applies equally to commodities, futures and stocks. For instance, if a company is dual-listed on two stock exchanges, and the prices are at variance, an arbitrageur has an opportunity to buy in one market and sell in another before the disparity is closed. 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). Further SuggestionsCurrency arbitrageRisk controlled arbitrage arbitrageur Triangular arbitrage Structured arbitrage transaction Convertible Arbitrage Index arbitrage Arbitrage Trading Program (ATP) Locational arbitrage Covered interest arbitrage Covered interest arbitrage Tax arbitrage Merger Arbitrage Arbitrageur Arbitrage Special arbitrage account Arbitrage free option pricing models conversion arbitrage International arbitrage Triangular arbitrage Multiple Arbitrage |
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