Structured arbitrage transaction
A self-funding, self-hedged series of transactions that usually utilize mortgage securities as the primary assets. |
Similar financial terms
Structured settlementAn agreement in settlement of a lawsuit involving specific payments made over a period of time. Property and casualty insurance companies often buy life insurance products to pay the costs of such settlements.
Structured portfolio strategy
A strategy in which a portfolio is designed to achieve the performance of some predetermined liabilities that must be paid out in the future.
Structured debt
Debt that has been customized for the buyer, often by incorporating unusual options.
Arbitrage
Buying an asset in one market at a lower price and simultaneously selling an identical asset in another market at a higher price. Thus, arbitrageurs take advantage of temporary price discrepancies between markets. By the actions of arbitrageurs, the differences are eliminated, driving prices up by their purchases in one market and driving prices down by their sales in the other.
Risk arbitrage
The practice of buying the stock of takeover targets after a merger is publicly announced and hold the stock until the deal is officially accomplished.
Triangular arbitrage
Striking offsetting deals among three markets simultaneously to obtain an arbitrage profit.
Riskless arbitrage
The simultaneous purchase and sale of the same asset to yield a profit.
Risk controlled arbitrage
A self-funding, self-hedged series of transactions that generally utilize mortgage securities as the primary assets.
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign currency and hedges his resulting foreign exchange risk by selling the proceeds of the investment forward for dollars.
Currency arbitrage
Taking advantage of divergences in exchange rates in different money markets by buying a currency in one market and selling it in another market.
Bootstrap transaction
A highly leveraged transaction (HLT)
Transactions costs
The transactions costs are the expenses to the execution of a trade. It includes the commissions plus the difference between the price obtained and the midpoint of the bid-offer spread.
Spread transaction
A position in two or more options of the same type.
Transactions motive
A desire to hold cash for the purpose of conducting cash based transactions.
Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
Transaction loan
A loan extended by a bank for a specific purpose. In contrast, lines of credit and revolving credit agreements involve loans that can be used for various purposes.
Transaction exposure
Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate.
Taxable transaction
Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.
Round-trip transactions costs
Costs of completing a transaction, including commissions, market impact costs, and taxes.
Cash transaction
A transaction where exchange is immediate, as contrasted to a forward contract, which calls for future delivery of an asset at an agreed-upon price.
Transaction
The entry or liquidation of a trade.
