Triangular arbitrage
Striking offsetting deals among three markets simultaneously to obtain an arbitrage profit. |
Similar financial terms
ArbitrageBuying 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.
Structured arbitrage transaction
A self-funding, self-hedged series of transactions that usually utilize mortgage securities as the primary assets.
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.
