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Tag Archive: ARBITRAGE


Commodity derivatives markets started in India in 1990s, The National Agriculture Policy, announced by the government in blog2000, advocated the development of futures markets so that consumers and producers of commodities could use these contracts to procure commodities at a more rational price than at the Minimum Support Price (MSP) set by the government, which came with a large cost to the exchequer. This set in place a drive of reforms in these markets, following the reform model that had lead to the development of the Indian equity markets previously.

In 2003 commodity futures contracts started trading on electronic exchanges with a nation-wide reach. Counterparty credit risk, that was a serious problem in the older exchanges, was eliminated using netting by novation at clearing houses similar to their more visible equity derivatives cousins. Total traded Continue reading

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Risk Arbitrageur

Takeover Target

Talking about Arbitrage – drama film directed by Nicholas Jarecki and starring Richard Gere. A troubled hedge fund magnate desperate to complete the sale of his trading empire makes an error that forces him to turn to an unlikely person for help.

It is well-known that risk arbitrageur play an important role in the market for corporate control. After a tender offer, the trading volume increases dramatically in large part because of risk arbitrageurs activity.They take long positions in the target stock, in the hope that the takeover will go through. They are also usually hedged by taking short positions in the acquirer’s stock. Continue reading

Merger Arbitrage

My question is about arbitrage (tenders and merger arb). I’ve been reading through Buffett’s old letters and in the late images1980’s he had quite an impressive run with his arbitrage investments (I think in 1987 he made around 80% on his arb investments).

Both he and Graham seem to have had long time success for decades using merger arb and other arbitrage techniques. I’m wondering if you ever employ any of these strategies in your portfolio? It seems like a specialized area, but also seems like an area that would add uncorrelated returns to the portfolio, and serve as a great substitute for cash when markets begin to become overvalued. Continue reading

The Risk Arbitrageur

Talking about Arbitrage –  drama film directed by Nicholas Jarecki and starring Richard Gere. A troubled hedge fund downloadmagnate desperate to complete the sale of his trading empire makes an error that forces him to turn to an unlikely person for help.

It is well-known that risk arbitrageur play an important role in the market for corporate control. After a tender offer, the trading volume increases dramatically in large part because of risk arbitrageurs activity. Continue reading

English: Expres Bank - Société générale retail...

Former Société Générale rogue trader Jerome Kerviel owes the bank $6.3 billion. I did mention him in my last posts SocGen Rogue Trader Jerome Kerviel and Rogue Trader Jerome Kerviel is Back .

Jerome Kerviel is learning one of life’s harsher lessons: It stinks to be $6.3 billion in debt. That’s how much his fraudulent trades in 2007 and 2008 cost French bank Société Générale, and how much he has been ordered to pay in restitution — after he gets out of jail in three years. A judge recently upheld these Continue reading

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