| Dictionary, Encyclopedia and Thesaurus - The Free Dictionary 1,506,342,579 visitors served. |
|
Dictionary/ thesaurus | Medical dictionary | Legal dictionary | Financial dictionary | Acronyms | Idioms | Encyclopedia | Wikipedia encyclopedia | ? |
Arbitrage |
Also found in: Dictionary/thesaurus, Legal, Encyclopedia, Wikipedia, Hutchinson | 0.02 sec. |
|
Arbitrage The simultaneous buying and selling of a security at two different prices in two different markets, resulting in profits without risk. Perfectly efficient markets present no arbitrage opportunities. Perfectly efficient markets seldom exist, but, arbitrage opportunities are often precluded because of transactions costs.
Arbitrage An investment practice that attempts to profit from inefficiencies in price by making transactions that offset each other. For example, one may buy a security at a low price and, within a few seconds, re-sell it to a willing buyer at a higher price. Arbitrageurs can keep prices relatively stable as markets try to resist their attempts at price exploitation. Arbitrageurs often use computer programs because their transactions can be complex and occur in rapid succession. Arbitrage. Arbitrage is the technique of simultaneously buying at a lower price in one market and selling at a higher price in another market to make a profit on the spread between the prices. Although the price difference may be very small, arbitrageurs, or arbs, typically trade regularly and in huge volume, so they can make sizable profits. But the strategy, which depends on split-second timing, can also backfire if interest rates, prices, currency exchange rates, or other factors move in ways the arbitrageurs don't anticipate. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
|
| ? Mentioned in | ? References in periodicals archive | |
|---|---|---|
Investment banks have been doing these kinds of arbitrages for years with their own equity capital, but these strategies are relatively new to institutions. Arbitrages Inefficient Markets - Harvesting agents enable the creation and execution of new arbitrage strategies. The fact is, no one arbitrages in small caps, because if they know about the (illiquidity) problem there, they know about the international funds. |
| Financial Dictionary |
| Free Tools: |
For surfers:
Browser extension |
Word of the Day |
Help
For webmasters: Free content | Linking | Lookup box | Double-click lookup | Partner with us |
|---|