- reversal arbitrage
- A riskless arbitrage that involves selling the stock short, writing a put, and buying a call. The options have the same terms. Bloomberg Financial Dictionary
Financial and business terms. 2012.
reversal arbitrage
Look at other dictionaries:
reversal — turn, unwind . For convertible reversal, selling a convertible and buying the underlying common, usually effected by an arbitrageur. For market reversal, change in direction in the stock or commodity futures markets, as charted by technical… … Financial and business terms
Options arbitrage — trades are commonly performed by floor traders in the options market to earn small profits with very little or zero risk. Traders perform conversions when options are relatively overpriced by purchasing stock and selling the equivalent options… … Wikipedia
Statistical arbitrage — In the world of finance and investments statistical arbitrage is used in two related but distinct ways:* In academic literature, statistical arbitrage is opposed to (deterministic) arbitrage. In deterministic arbitrage a sure profit can be… … Wikipedia
Credit default swap — If the reference bond performs without default, the protection buyer pays quarterly payments to the seller until maturity … Wikipedia
Futures contract — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond … Wikipedia
Hedge (finance) — For other uses, see Hedge (disambiguation). Finance Financial markets … Wikipedia
Forward contract — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond … Wikipedia
Carry (investment) — The carry of an asset is the return obtained from holding it (if positive), or the cost of holding it (if negative) (see also Cost of carry). For instance, commodities are usually negative carry assets, as they incur storage costs or may suffer… … Wikipedia
Black–Scholes — The Black–Scholes model (pronounced /ˌblæk ˈʃoʊlz/[1]) is a mathematical model of a financial market containing certain derivative investment instruments. From the model, one can deduce the Black–Scholes formula, which gives the price of European … Wikipedia
Volatility smile — In finance, the volatility smile is a long observed pattern in which at the money options tend to have lower implied volatilities than in or out of the money options. The pattern displays different characteristics for different markets and… … Wikipedia
