Arbitrage strategies can help investors make profits with little risk by taking advantage of price discrepancies. Examples include basic arbitrage, stock arbitrage, index fund arbitrage, and sports betting arbitrage. The use of these strategies can result in guaranteed orders and profits. The correct use of arbitrage strategies can help the investor to make profits with […]
Equity arbitrage involves buying and selling shares of the same or similar stock to make a net profit, with traditional equity arbitrage involving buying and selling shares of the same stock priced differently in different markets. Variations, such as merger and pair swap arbitrage, carry some risk. Equity arbitrage is the buying and selling of […]
Arbitrage pricing theory helps set the pricing model for stocks by representing the anticipated return on any asset as a linear calculation of macroeconomic factors and market indices. It is commonly used in today’s stock market to analyze current conditions and respond accordingly. One of the first things to understand about arbitrage pricing theory is […]
Currency arbitrage involves buying and selling a currency simultaneously in different markets to take advantage of price differences. It requires powerful computers and software to identify profit opportunities and eliminate risks. Even minor differences in prices can justify an arbitration settlement, but transactions must be concurrent to avoid losses. Currency arbitrage is the simultaneous buying […]
Volatility arbitrage is a strategy that aims to maximize profits by considering the difference between an option’s implied volatility and its future realized volatility, within a delta-neutral portfolio. The investor carefully evaluates predictable factors that could affect the risk associated with an option in the future, and looks for options with different levels of volatility […]
Merger arbitrage involves trading shares of companies involved in a possible merger to take advantage of price discrepancies before and after the merger. An investor buys shares in the company being acquired and sells shares in the acquiring company as a hedge. The strategy benefits from the time between the announcement and the deal, but […]
International arbitrage involves exploiting price differences between goods and securities in different countries through simultaneous buying and selling. It is viewed as a low-risk investment, but requires quick communication and timing. Market imbalances are short-lived and can be affected by the investor’s actions. International arbitrage revolves around exploiting price differences between goods and securities in […]
Stock arbitrage involves buying and selling shares of the same or similar stock to make a net profit. Traditional arbitrage involves no risk, while variations like merger and pair trading involve some risk. Stock arbitrage is the buying and selling of shares of the same or similar stock with the goal of making a net […]
Conversion arbitrage is a low-risk strategy involving the purchase of an asset, a sale option, and a buy option with the same exercise and expiration price. It can generate quick gains but may also result in small losses depending on market factors. Conversion arbitrage is an inversion strategy that essentially involves three specific actions that […]
