![]() |
|
Financial Terms | |
Arbitrage |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: finance, business, investment, accounting, inventory, money, payroll, credit, |
Definition of ArbitrageArbitrageThe purchase of securities on one market for immediate resale on ArbitrageThe simultaneous buying and selling of a security at two different prices in two different markets, ArbitrageTransactions designed to make a sure profit from inconsistent prices.
Related Terms:Arbitrage-free option-pricing modelsYield curve option-pricing models. Arbitrage Pricing Theory (APT)An alternative model to the capital asset pricing model developed by ArbitrageursPeople who search for and exploit arbitrage opportunities. Covered interest arbitrageA portfolio manager invests dollars in an instrument denominated in a foreign Currency arbitrageTaking advantage of divergences in exchange rates in different money markets by ![]() Index arbitrageAn investment/trading strategy that exploits divergences between actual and theoretical Risk arbitrageSpeculation on perceived mispriced securities, usually in connection with merger and Risk controlled arbitrageA self-funding, self-hedged series of transactions that generally utilize mortgage Riskless arbitrageThe simultaneous purchase and sale of the same asset to yield a profit. Structured arbitrage transactionA self-funding, self-hedged series of transactions that usually utilize Triangular arbitrageStriking offsetting deals among three markets simultaneously to obtain an arbitrage profit. American Depositary Receipts (ADRs)Certificates issued by a U.S. depositary bank, representing foreign Black-Scholes option-pricing modelA model for pricing call options based on arbitrage arguments that uses Lifting a legClosing out one side of a long-short arbitrage before the other is closed. One-factor APTA special case of the arbitrage pricing theory that is derived from the one-factor model by Perfect capital marketA market in which there are never any arbitrage opportunities. Put-call parity relationshipThe relationship between the price of a put and the price of a call on the same Spot futures parity theoremDescribes the theoretically correct relationship between spot and futures prices. Yield curve option-pricing modelsModels that can incorporate different volatility assumptions along the Zero-investment portfolioA portfolio of zero net value established by buying and shorting component Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |