05-22-2008, 04:24 PM | #11 | |
Senior Member
Join Date: Jan 2006
Posts: 5,084
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Quote:
Stock X is being bought out at $40 a share. However it is currently trading at $39.50. An abitrager will step in and buy the stock at $39.50. He will have to factor in how long before the deal closes and the interest he could have made on the $39.50 vs the .50 gain. It can get a lot more complicated when you have supposed imbalances in currencies, interest rates, futures , etc. |
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