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Longman Dictionary of Contemporary English
arbitrage
noun
COLLOCATIONS FROM CORPUS
■ NOUN
index
▪ Some estimates of the round-trip transactions costs involved in stock index arbitrage are set out in Table 5.1.
▪ There are two types of programme trading - index arbitrage and portfolio insurance.
▪ He examined whether a mispricing triggered index arbitrage transactions within a few minutes.
▪ The most important form of programme trading is the buying and selling of shares as part of index arbitrage.
opportunity
▪ They fear an end to the open outcry system and a lack of arbitrage opportunities on the new system.
▪ After allowing for transactions costs, he concluded that very few arbitrage opportunities remained.
▪ It is a disequilibrium situation which can not survive as it offers investors a profitable arbitrage opportunity.
▪ If the actual sterling-dollar exchange rate differs from 2.00, then an arbitrage opportunity exists.
▪ This arbitrage opportunity raises the attractiveness of sterling and reduces the attractiveness of dollars.
▪ As well as searching for arbitrage opportunities, computers can also be used to initiate programme trades.
▪ Provided the futures price lies somewhere within this band, no arbitrage opportunities exist.
▪ The importance of computers is that these arbitrage opportunities can be quickly spotted and capitalised upon.
portfolio
▪ This price change will produce a matching change in the weights of an arbitrage portfolio.
▪ It is also possible that the shares chosen for inclusion in the arbitrage portfolio are those which have a high price elasticity.
profit
▪ This will result in an unpredictable profit or loss, in addition to the certain arbitrage profit that motivated the trade.
▪ The introduction of a trading lag of half a day reduced, but did not eliminate, these arbitrage profits.
▪ So to avoid significant arbitrage profits, the futures and spot prices must converge.
▪ Over time, these arbitrage profits have become riskier, and their average size has declined.
EXAMPLES FROM CORPUS
▪ He rejected stale prices as a cause, but found some support for arbitrage risk as an explanation of mispricing.
▪ In Chapter 6 the variant known as the arbitrage pricing model will be presented.
▪ Markets typically include a provision for resolving disagreements by returning the product or through arbitrage in other cases.
▪ Our investors always took risk; high-wire act would have been more accurate than arbitrage.
▪ The justification for this assumption is that the arbitrage transaction is riskless, and so repayment is guaranteed.
▪ This arbitrage opportunity raises the attractiveness of sterling and reduces the attractiveness of dollars.
▪ This delayed cash flow will alter the net present value of an arbitrage transaction which involves buying shares.
▪ When they allowed for four different levels of transactions costs, they concluded that many potential opportunities for profitable arbitrage remained.
The Collaborative International Dictionary
Arbitrage

Arbitrage \Ar"bi*trage\, n. [F., fr. arbiter to give judgment, L. arbitrari.]

  1. Judgment by an arbiter; authoritative determination.

  2. (Com.) A traffic in bills of exchange (see Arbitration of Exchange).

  3. (Finance) the simultaneous or near simultaneous purchase and sale of the same or closely linked securities or commodities in different markets to make a profit on the (often small) differences in price.

Douglas Harper's Etymology Dictionary
arbitrage

"exercise of the function of an arbitrator," late 15c., from Old French arbitrage "arbitration, judgment," from arbitrer "to arbitrate, judge," from Late Latin arbitrari, from Latin arbiter (see arbiter).

Wiktionary
arbitrage

n. (context finance English) A market activity in which a security, commodity, currency or other tradable item is bought in one market and sold simultaneously in another, in order to profit from price differences between the markets. vb. (context intransitive finance English) To employ #Noun

WordNet
arbitrage

n. a kind of hedged investment meant to capture slight differences in price; when there is a difference in the price of something on two different markets the arbitrageur simultaneously buys at the lower price and sells at the higher price

arbitrage

v. practice arbitrage, as in the stock market

Wikipedia
Arbitrage (film)

Arbitrage is a 2012 American thriller drama film directed by Nicholas Jarecki and starring Richard Gere, Susan Sarandon, Tim Roth and Brit Marling. Filming began in April 2011 in New York City. It opened in U.S. theaters in September 2012.

Arbitrage

In economics and finance, arbitrage (, , ) is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs. For instance, an arbitrage is present when there is the opportunity to instantaneously buy low and sell high.

In principle and in academic use, an arbitrage is risk-free; in common use, as in statistical arbitrage, it may refer to expected profit, though losses may occur, and in practice, there are always risks in arbitrage, some minor (such as fluctuation of prices decreasing profit margins), some major (such as devaluation of a currency or derivative). In academic use, an arbitrage involves taking advantage of differences in price of a single asset or identical cash-flows; in common use, it is also used to refer to differences between similar assets ( relative value or convergence trades), as in merger arbitrage.

People who engage in arbitrage are called arbitrageurs —such as a bank or brokerage firm. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies.

Usage examples of "arbitrage".

The Campus had been active just over nineteen months, and that time had mostly been spent in establishing their cover as a trading and arbitrage business.

Oliver, or someone on the arbitrage desk, had traded on inside information.

During that six-month period Oliver would perform special projects for McCarthy, and when the cooling-off period was over, the arbitrage desk could start up again, but it would have to act legitimately.

Mussolini was then inclined to accept a role in a dual court arbitrage and Ciano made a proposal to Ribbentropp to that effect.

October 30, Ciano and Ribbentropp arrived in Vienna, and there they rendered the first Viennese Arbitrage decision.

Soon we were informed that the English Government communicated to our Ambassador to London Barcza that they accepted the news of the Arbitrage with pleasure and contentment.

The French official circles did not emit any particular statements, but the French papers emphasized that the Arbitrage decisions eliminated some very grave entanglements.

Political circles seemed to observe a cardinal change in the attitude of Minister President Bela Imredy following the first Viennese Arbitrage decision.

German general staff, on the other hand, requested that Hungarian Army units should occupy the southern slopes of the Carpathians, which had been given at the Second Viennese Arbitrage to Rumania.

The negotiations also stated that in all these strategic military actions the frontier lines drawn at the Second Viennese Arbitrage did not have to be taken into consideration, meaning that the Hungarian Army units could take up defense positions anywhere in the southern Carpathians.

Czechoslovakia, Rumania, and Yugoslavia, withdrawing within her boundaries prior to the two Viennese Arbitrage decisions.

Bela Imredy, a liberal, mercantilist, that the Munich Conference and the First Viennese Arbitrage decisions took place.

He reached the Second Viennese Arbitrage with the help of Berlin and Rome, and there, however, the surrounding symptoms only proved to him that the Germans were playing a treacherous game.

Army would not be disarmed but would be furnished with modern equipment, that her frontiers were to stay the same as those traced in the two Viennese Arbitrage decisions and, concerning the return of the entire Transylvanian territory, a separate proposition would have to be submitted.

The pound had been fluctuating wildly in the money markets of the world and the arbitrage dealers had made a killing.