Riskless arbitrage

The simultaneous purchase and sale of the same asset to yield a profit. The New York Times Financial Glossary

Financial and business terms. 2012.

Look at other dictionaries:

  • riskless arbitrage — The simultaneous purchase and sale of the same asset to yield a profit. Bloomberg Financial Dictionary …   Financial and business terms

  • arbitrage — The purchase of a commodity against the simultaneous sale of a commodity to profit from unequal prices. The two transactions may take place on different exchanges, between two different commodities, in different delivery months, or between the… …   Financial and business terms

  • riskless transaction — A transaction that is guaranteed a profit, such as the arbitrage of a temporary differential between commodity prices in two different markets. The evaluation of whether dealer markups and markdowns in OTC transactions are reasonable. According… …   Financial and business terms

  • discount arbitrage — A riskless arbitrage in which a discount option is purchased and an opposite position is taken in the underlying security. The arbitrageur may either buy a call at a discount and simultaneously sell the underlying security (basic call arbitrage)… …   Financial and business terms

  • reversal arbitrage — A riskless arbitrage that involves selling the stock short, writing a put, and buying a call. The options have the same terms. Bloomberg Financial Dictionary …   Financial and business terms

  • Cash-And-Carry-Arbitrage — A combination of a long position in an asset such as a stock or commodity, and a short position in the underlying futures. This arbitrage strategy seeks to exploit pricing inefficiencies for the same asset in the cash (or spot) and futures… …   Investment dictionary

  • Reverse Cash-and-Carry-Arbitrage — A combination of a short position in an asset such as a stock or commodity, and a long position in the futures for that asset. Reverse cash and carry arbitrage seeks to exploit pricing inefficiencies for the same asset in the cash (or spot) and… …   Investment dictionary

  • convertible arbitrage — A practice, usually of buying a convertible bond and shorting a percentage of the equivalent underlying common shares, to create a positive cash flow position (with expected returns above the riskless rate) in a static environment and benefit… …   Financial and business terms

  • Risk Arbitrage — A broad definition for three types of arbitrage that contain an element of risk: 1) Merger and acquisition arbitrage The simultaneous purchase of stock in a company being acquired and the sale (or short sale) of stock in the acquiring company. 2) …   Investment dictionary

  • Triangular Arbitrage — The process of converting one currency to another, converting it again to a third currency and, finally, converting it back to the original currency within a short time span. This opportunity for riskless profit arises when the currency s… …   Investment dictionary

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