Dec 102020
 

The purchase or sale of an instrument and simultaneously taking an equal and opposite position in a related instrument to profit from mispricing. e.g. sell a bond future, borrow money to buy the bond (or repo the bond) and then wait until maturity and deliver the bond. If the futures are mispriced then there will be a risk free arbitrage profit. Carried out by an Arbitrageur

Join our mailing list or RSS feed for more advice on the meaning of banking terms Arbitrage. And why not leave a comment below?

Context

Do you have an example of where Arbitrage can be used in context. Help me develop the site by leaving an example below. Every example using ‘Arbitrage’ gets you another entry into the draw for 100 GBP of Amazon vouchers.

A winner will be selected on [date].

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

(required)

(required)