| 单词 | arbitrage | ||||||
| 释义 | arbitragear·bi·trageA0398900 (är′bĭ-träzh′)arbitrage(ˈɑːbɪˌtrɑːʒ; ˈɑːbɪtrɪdʒ)ar•bi•trage(ˈɑr bɪˌtrɑʒ)n., v. -traged, -trag•ing. n. arbitragearbitrage
arbitragearbitrage:see foreign exchangeforeign exchange,methods and instruments used to adjust the payment of debts between two nations that employ different currency systems. A nation's balance of payments has an important effect on the exchange rate of its currency. ..... Click the link for more information. . ArbitrageArbitrageThe simultaneous purchase in one market and sale in another of a security or commodity in hope of making a profit on price differences in the different markets. In its simplest form, arbitrage is "buying low and selling high." In this sense, any trader who buys something in one market—whether it is a commodity like grain, financial Securities such as stock in a company, or a currency such as the Japanese yen—and sells it in another market at a higher price is engaged in arbitrage. That trader is called an arbitrageur. In economic theory, arbitrage is a necessary activity in any market, helping to reduce price disparities between different markets and to increase a market's liquidity (ability to buy and sell). Arbitrage can be divided into the categories of riskless and risk. As an example of riskless arbitrage, imagine that the price of Microsoft Corporation common stock on the Pacific Coast Stock Exchange is less than the price of the same stock on the New York Stock Exchange. A trader who buys Microsoft stock at the lower price on the Pacific Coast exchange and simultaneously sells it for a higher price on the New York exchange is engaging in an essentially riskless transaction. Aided by the speed of modern communications, the buying and selling occur at virtually the same time. This type of exchange occurs daily in the currency market, where a trader may buy French francs at a lower price in London and sell them at a higher price in Singapore. Much arbitrage falls into the risk category. This type of arbitrage is not always completed with a sale at a higher price; it involves a risk that the price of the item being traded will fall before the trader can sell it. Risk Arbitrage came into prominence during the 1980s, when investors began to take advantage of a business atmosphere encompassing a large number of company Mergers and Acquisitions. In a merger or acquisition, one company buys or takes over another company. When the management of the targeted company does not want to be acquired by a particular investor or group of investors, the merger is called a hostile takeover. Quite often, the aggressors in such takeovers are smaller in terms of assets than their targets. A hostile takeover is usually initiated when someone believes that the stock of a particular company is lower than its potential value, whether because of poor management or because of a lack of information about the true value of that company. One way that hostile takeovers are initiated is through a device called the cash tender offer. The party attempting to initiate the takeover announces that it will pay cash for the target company's stock at a price well above the current market value. At this point, risk arbitrageurs become involved in the game. They buy stock from shareholders in the target company, then attempt to sell that stock at the higher price to the party attempting the takeover. If the takeover succeeds and the arbitrageurs receive a higher price for their stock, they profit; if the takeover fails or the arbitrageurs receive a lower price for their stock, they lose. Gauging the risk of a takeover's failure is therefore crucial to an arbitrageur's success. An arbitrageur who purchases securities on the basis of inside information—that is, information about a pending takeover that is not available to the general public—violates the Securities Exchange Act of 1934 (§ 10[b], as amended, 15 U.S.C.A. § 78j[b]). However, purchasing securities on the basis of rumors about an imminent takeover is not illegal. Ivan F. Boesky was one example of a risk arbitrageur who was found guilty of engaging in insider trading. Boesky profited enormously from the many corporate takeovers of the mid-1980s. By 1985, he had become famous in financial circles and had published a book, Merger Mania: Arbitrage: Wall Street's Best Kept Money-Making Secret, that extolled the opportunities in risk arbitrage and the benefits the practice gave to the market. In 1986, only one year later, Boesky admitted that he had illegally traded on insider information obtained from Drexel Burnham Lambert, the securities firm that arranged the financing of many of the takeovers of the era. In return for a reduced sentence of three years in prison, Boesky agreed to pay a $100 million penalty and to cooperate with the government's continuing investigation. Boesky named Drexel employee Michael R. Milken as a member of the insider trading network. In 1990, Boesky was released from prison after serving two years. Further readingsBoesky, Ivan. 1985. Merger Mania. New York: Holt, Rinehart. "Complex Plan of Finance Successfully Navigates Arbitrage Rules." 2003. Tax Management Memorandum 44 (February 10): 60–61. Steuerle, Gene. 2002. "Defining Tax Shelters and Tax Arbitrage." Tax Notes 95 (May 20): 1249–50. Stokeld, Fred. 2001. "IRS on the Prowl for Illegal Arbitrage. Tax Notes 92 (September 10): 1396–98. Cross-referencesBonds "Michael R. Milken" (sidebar); Corporations; Securities; Securities and Exchange Commission. arbitrageArbitrageArbitragearbitrageArbitrage.Arbitrage is the technique of simultaneously buying at a lower price in one market and selling at a higher price in another market to make a profit on the spread between the prices. Although the price difference may be very small, arbitrageurs, or arbs, typically trade regularly and in huge volume, so they can make sizable profits. But the strategy, which depends on split-second timing, can also backfire if interest rates, prices, currency exchange rates, or other factors move in ways the arbitrageurs don't anticipate. arbitragethe buying and selling of PRODUCTS, FINANCIAL SECURITIES or FOREIGN CURRENCIES between two or more markets in order to take profitable advantage of any differences in the prices quoted in those markets.If the price of the same product is different, as between two markets, a dealer, by simultaneously buying in the lower-priced market and reselling in the higher-priced market, stands to make a profit on the transaction (allowing for dealing expenses). Arbitrage thus serves to narrow or eliminate price differentials between markets, with buying in the lower-priced market causing prices to rise there, and selling in the higher-priced market causing prices to fall. See SPOT MARKET, ARBITRAGEUR, SPECULATION, COVERED INTEREST ARBITRAGE. arbitragethe buying or selling of PRODUCTS, FINANCIAL SECURITIES or FOREIGN CURRENCIES between two or more MARKETS in order to take profitable advantage of any differences in the prices quoted in these markets. By simultaneously buying in a low-price market and selling in the high-price market a dealer can make a profit from any disparity in prices between them, though in the process of buying and selling the dealer will add to DEMAND in the low-price market and add to SUPPLY in the high-price market, so narrowing or eliminating the price disparity. See SPOT MARKET, FUTURES MARKET, COVERED INTEREST ARBITRAGE.arbitrageThe simultaneous purchase in one market and sale in another market of a commodity, security,or monies,in the expectation of making a profit on price differences in the differing markets. Generally thought of as involving foreign currency exchanges,in which one enters contracts to buy euros and sell yen and hopefully make money in a moment in time when the exchange rates work out in one's favor (this is highly risky). arbitrage
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arbitrage - 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 - practice arbitrage, as in the stock market