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arbitrageur |
Also found in: Dictionary/thesaurus, Hutchinson | 0.06 sec. |
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Arbitrageur A type of investor who attempts to profit from price inefficiencies in the market by making simultaneous trades that offset each other and capture risk-free profits. An arbitrageur would, for example, seek out price discrepancies between stocks listed on more than one exchange, buy the undervalued shares on the one exchange while short selling the same number of overvalued shares on the other exchange, thus capturing risk-free profits as the prices on the two exchanges converge. Notes: Arbitrageurs are typically very experienced investors since arbitrage opportunities are difficult to find and require relatively fast trading. Arbitrageurs also play an important role in the operation of capital markets, as their efforts in exploiting price inefficiencies keep prices more accurate than they otherwise would be. Arbitrageur One who profits from the differences in price when the same, or extremely similar, security, currency, or commodity is traded on two or more markets. The arbitrageur profits by simultaneously purchasing and selling these securities to take advantage of pricing differentials (spreads) created by market conditions. See: Risk arbitrage, convertible arbitrage, index arbitrage, and international arbitrage.
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| Working together, a put-call system would allow the Saban group to sell its shares to Televisa at a preferred price without interference from arbitragers or other traders. The Wall Street arbitragers who lost a bundle when the deal cratered think the FTC's action was triggered by complaints from Office Max, the third major superstore chain, which stood to get some assets on the cheap if the government forced the merged entity to spin them off in the name of protecting competition. Simply, as the currencies were devalued in Asia, China, Japan and Russia, and the arbitragers lost money, it also made the cost of the overseas goods cheaper against the American dollar. |
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arbitragers
