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Page "Arbitrage" ¶ 42
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arbitrage and itself
* Exchange-traded fund arbitrage – Exchange Traded Funds allow authorized participants to exchange back and forth between shares in underlying securities held by the fund and shares in the fund itself, rather than allowing the buying and selling of shares in the ETF directly with the fund sponsor.

arbitrage and form
* Some types of hedge funds make use of a modified form of arbitrage to profit.
Charles Ponzi promised clients a 50 % profit within 45 days, or 100 % profit within 90 days, by buying discounted postal reply coupons in other countries and redeeming them at face value in the United States as a form of arbitrage.
This was a form of arbitrage, or profiting by buying an asset at a lower price in one market and immediately selling it in a market where the price is higher, which is not illegal.
* Basis trading, a form of arbitrage in which securities are bought in the cash market and a short in a forward contract
International efforts to promote free trade, including reduced tariffs and harmonized national standards, facilitate this form of arbitrage whenever manufacturers attempt to preserve highly disparate pricing.
The advantage of being able to deduct interest, on the one hand, and yet not include in income the interest credited to the policy's cash value is a form of " tax arbitrage.
Ticket resale is a form of arbitrage that arises when the amount demanded at the sale price exceeds the amount supplied ( that is, when event organizers charge less than the equilibrium prices for the tickets ).
In economics, a suicide pill is a form of risk arbitrage used by corporations to thwart hostile takeover attempts.
Stoozing can also be viewed as a form of arbitrage.

arbitrage and relatively
Some day trading strategies ( including scalping and arbitrage ) require relatively sophisticated trading systems and software.
These arbitrage strategies involve a long position in the relatively underpriced part of the DLC and a short position in the relatively overpriced part.

arbitrage and cheap
Global labor arbitrage, a phenomenon described by economist Stephen S. Roach, where one country exploits the cheap labor of another, would be a case of absolute advantage that is not mutually beneficial.
Under some market conditions, NaS batteries provide value via energy arbitrage ( charging battery when electricity is abundant / cheap, and discharging into the grid when electricity is more valuable ) and voltage regulation.

arbitrage and longer
The bet in this municipal bond arbitrage is that, over a longer period of time, two similar instruments — municipal bonds and interest rate swaps — will correlate with each other ; they are both very high quality credits, have the same maturity and are denominated in U. S. dollars.
Because longer maturity municipal bonds tend to offer significantly higher after-tax yields than corporate bonds with the same credit rating and maturity, investors in higher tax brackets may be motivated to arbitrage municipal bonds against corporate bonds using a strategy called municipal bond arbitrage.

arbitrage and maturity
Investors cannot then earn arbitrage profits by borrowing in a country with a lower interest rate, exchanging for foreign currency, and investing in a foreign country with a higher interest rate, due to gains or losses from exchanging back to their domestic currency at maturity.

arbitrage and municipal
Also called municipal bond relative value arbitrage, municipal arbitrage, or just muni arb, this hedge fund strategy involves one of two approaches.

arbitrage and bond
Convertible arbitrage consists of buying a convertible bond and hedging two of the three factors in order to gain exposure to the third factor at a very attractive price.
Thus given no arbitrage opportunities, the above relationship ( put-call parity ) holds, and for any three prices of the call, put, bond and stock one can compute the implied price of the fourth.
Another common arbitrage strategy aims to exploit the fact that the swap-adjusted spread of a CDS should trade closely with that of the underlying cash bond issued by the reference entity.
Two members of the Salomon Brothers ' bond arbitrage, John Meriwether and Myron Scholes, later became a founder and a consultant for Long-Term Capital Management, a hedge fund that collapsed in 1998.
In pursuit of their goal of both steady returns and low volatility, the arbitrageurs can focus upon interest rate swaps, US non-US government bond arbitrage, see US Treasury security, forward yield curves, and / or mortgage-backed securities.
Another set of HFT strategies is classical arbitrage strategy might involve several securities such as covered interest rate parity in the foreign exchange market which gives a relation between the prices of a domestic bond, a bond denominated in a foreign currency, the spot price of the currency, and the price of a forward contract on the currency.

arbitrage and which
One problem with sports arbitrage is that bookmakers sometimes make mistakes and this can lead to an invocation of the ' palpable error ' rule, which most bookmakers invoke when they have made a mistake by offering or posting incorrect odds.
However, since there is no identifiable date at which DLC prices will converge, arbitrage positions sometimes have to be kept open for considerable periods of time.
A good illustration of the risk of DLC arbitrage is the position in Royal Dutch Shell — which had a DLC structure until 2005 — by the hedge fund Long-Term Capital Management ( LTCM, see also the discussion below ).
A hedge fund that is an example of this type of arbitrage is Greenridge Capital, which acts as an angel investor retaining equity in private companies which are in the process of becoming publicly traded, buying in the private market and later selling in the public market.
Private to public equities arbitrage is a term which can arguably be applied to investment banking in general.
The concession for packet communications, perhaps against the constraint of limited international telephony competition ( with the global exceptions of callback, transit and re-file arbitrage ) -- created conditions in which Skype was natively created.
Arbitrage betting is a combination of the ancient art of arbitrage trading and gambling, which has been made possible by the large numbers of bookmakers in the marketplace, creating occasional opportunities for arbitrage.
Other event-driven strategies include: credit arbitrage strategies, which focus on corporate fixed income securities ; an activist strategy, where the fund takes large positions in companies and uses the ownership to participate in the management ; a strategy based on predicting the final approval of new pharmaceutical drugs ; and legal catalyst strategy, which specializes in companies involved in major lawsuits.
Iceland, furthermore, has great advantages for communications companies as they are effectively immune from defamation lawsuits for disseminating any adverse information about public events or companies or figures, which is a key driver of day trading and arbitrage activity.
The state backs its claim on the grounds that the crime committed is considered a crime against all, which any state is authorized to punish, as it is too serious to tolerate jurisdictional arbitrage.
Deciding on the jurisdiction ( jurisdictional arbitrage ) is part of litigation strategy for both plaintiff and defendant, in which the make up of the likely juries in each court, and the differences between federal and state court procedures figure highly.
Some funds require that orders be placed hours or days in advance, in order to simplify their administration, make it easier to match buyers with sellers, and eliminate the possibility of arbitrage ( for example if the fund holds investments which are traded in other time zones ).
The way in which they arrived at this conclusion made use of the " no arbitrage " argument, i. e. the premise that any state of affairs that will allow traders of any market instrument to create a riskless money machine will almost immediately disappear.
In the same year, Claude Buffier published Homère en arbitrage, in which he concluded that both parties were really agreed on the essential point that Homer was one of the greatest geniuses the world had seen, and that, as a whole, no other poem could be preferred to his ; and, soon after ( on 5 April 1716 ) in the house of Jean-Baptiste de Valincourt, Mme.
* Easy Access to Information: Mobile phones enables users to access valuable information such as prices, arbitrage and market or trade opportunities which could better prepare them for business transactions.
An alternative is to use the lump sum to pay premiums into a UL policy on a single premium or limited premium basis, creating tax arbitrage when the costs of insurance are paid from untaxed excess interest credits, which may be crediting at a higher rate than other guaranteed, no risk asset classes ( e. g. U. S. Treasury Bonds or U. S. Savings Bonds ).
There are essentially two reasons to use program trading, either because of the desire to trade a large number of stocks at the same time ( for example, when a mutual fund receives an influx of money it will use that money to increase its holdings in the multiple stocks which the fund is based on ), or alternatively to arbitrage temporary price discrepancies between related financial instruments, such as between an index and its constituent parts.
The formal model underlying the hypothesis is the uncovered Interest Rate Parity condition which states that in absence of a risk premium, arbitrage will ensure that the depreciation or appreciation of a country's currency vis a vis another will be equal to the nominal interest rate differential between them.
The difference between arbitrage and a typical investment is the amount of reward: the risk in what is known as arbitrage today ( to distinguish it from theoretical arbitrage, which effectively does not exist ) is market neutral.

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