Tag: arbitrage

What is 'Heath-Jarrow-Morton Model - HJM Model' A model that applies forward rates to an existing term structure of interest rates to determine...

DefinitionYield burning is a form of financial fraud involving the United States municipal bond market. Yield Burning What is 'Yield Burning' The...

What is an implied call and how can you use it in your trading strategy An implied call is a situation in which the underlying...

DefinitionContango is a situation where the futures price of a commodity is higher than the anticipated spot price at maturity of the futures contract....

What is 'Parity' Parity refers to two things being equal to each other. The term "par value" for a bond is similar...

What is 'Parity Bond' Two or more bond issues with equal rights to one another. In other words, a parity bond is...

What is 'Garbatrage' An increase in price and trading volume in a particular sector of the economy that occurs as a result...

What is 'Tax Arbitrage' The practice of profiting from differences between the way transactions are treated for tax purposes. The complexity of...

DefinitionUncovered interest arbitrage is an arbitrage trading strategy whereby an investor capitalizes on the interest rate differential between two countries. Unlike covered interest arbitrage,...

DefinitionThe law of one price constitutes the basis of the theory of purchasing power parity, an assumption that in some circumstances it would cost...