Meaning INDEX ARBITRAGE: An investment/trading strategy that exploits divergences between actual and theoretical futures prices. An example is the simultaneous buying (selling) of stock index futures (i.e., S;P 500) while selling (buying) the underlying stocks of that index, capturing as profit the temporarily inflated basis between these two baskets. Often, the point at which profitability exists is expressed at the block call as the number of points the future must be over or under the underlying basket for an arbitrage opportunity to exist. See: Program trading
More terms such as Index arbitrage in Dictionary I.
- Definition Initial Public Offering (IPO):
- Examples first sale of stock to the public. Securities offered in an IPO are often, but not always, those of young, small companies seeking outside equity capital and a public market for their stock index arbitrage definition.
- Definition Interest Rate Cap:
- Examples An interest rate agreement in which payments are made when the reference rate exceeds the strike rate. Also called an interest rate ceiling index arbitrage explain.
- Definition Interest-Only Loan:
- Examples A loan in which payment of principal is deferred and interest payments are the only current obligation index arbitrage what is.
- Definition I-I Page:
- Examples In over-the-counter trading, same as H-H page, but exclusively for OTC stocks index arbitrage meaning.
- Definition Investment Company Act Of 1940:
- Examples Legislation that requires investment companies to register with the SEC and that outlines standards by which they must operate index arbitrage abbreviation.
