FT MarketWatch

Arbitrage house

A Financial institution which engages in arbitrage. Such firms look for Market inefficiencies and securities which they feel are mispriced, and then undertake trades which allow them to make riskless Profit. Arbitrage opportunities are often very difficult to detect, since mispricings can be very small. Further, Arbitrage opportunities tend to disappear almost immediately since Market forces act to reverse the opportunity. Given these characteristics of arbitrage, many Arbitrage houses are equipped with very sophisticated computer software and hardware to help them identify potential opportunities and act on them very quickly. Many Arbitrage houses also develop complex software-driven mathematical models to identify mispricings and Market inefficiencies.

Related Terms: 19 Arbitrage, Arbitrage house, ECU, Financial institution, FIN, House, Inc., ITS, Low, Mode, Market, Profit, PPO, Pot, Put, Risk, SEC, Trade, Unit
Other Related Pages: Category: Strategies Starting With: A
Semi Related Terms: 718 CLICK HERE TO VIEW
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profit, Deposit in transit, Date of issue, Date of payment, Dealer market, Debt market, Dollar price, Drawn securities, Del credere agency, Division of Enforcement, Division of Investment Management, Division of Market Regulation, Date of record, Dividend discount model, Dividend in arrears, Desk (the), Division of labor, Delivery price, De-escalation clause, De facto, Durable Power of Attorney, Date of maturity, Debtor in possession, Debtor-in-possession financing, Deed of Release, Deed of Trust, Default risk, Discharge of bankruptcy, Discharge of lien, Due-on-sale clause, Deep in the money, Deep out of the money, Deed of Surrender, Department of Housing and Urban Development, Diversifiable risk, Dogs of the Dow, Daily low, Daylight trade, Day trade, Dead cat bounce, Deep market, Depth of market, Double auction market, Downside risk, Eurodollar certificate of deposit, Equity risk premium, Escrowed to maturity, Event risk, Ex-legal, External market, Either-or order, ECU, European 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