— Also termed space arbitrage. [Cases: Securities Regulation 53.17(4). C.J.S. Securities Regulation § 153.] — arbitrager (ahr-b[schwa]-trazh-[schwa]r), arbitrageur (ahr-b[schwa]-trah-zh[schwa]r), n.
covered-interest arbitrage. The simultaneous investment in a currency and execution of spotand forward-rate foreign-exchange contracts to take advantage of exchange-rate and interest-rate differentials between currencies without assuming foreign-exchange risk.
currency arbitrage. The simultaneous purchase of a currency in one market and sale of it in another to take advantage of differences or fluctuations in exchange rates.
kind arbitrage. Purchase of a security that, having no restriction other than the payment of money, is exchangeable or convertible within a reasonable time to a second security, with a simultaneous offsetting sale of the second security.
— Also termed convertible arbitrage.
risk arbitrage. Arbitrage of assets that are probably, but not necessarily, equivalent; esp., arbitrage of corporate stock in a potential merger or takeover, whereby the target company’s stock is bought and the acquiring company’s stock is sold simultaneously.
time arbitrage. Purchase of a commodity against a present sale of the identical commodity for a future delivery; esp., the simultaneous buying and selling of securities for immediate delivery and future delivery, with the hope of profiting from the difference in prices.
