Home > Term: Discount arbitrage
Discount arbitrage
A riskless arbitrage in which a discount option is purchased and an opposite position is taken in the underlying security. The arbitrageur may either buy a call at a discount and simultaneously sell the underlying security (basic call arbitrage) or maybuy a put at a discount and simultaneously buy the underlying security (basic put arbitrage). See also Discount.
- Part of Speech: noun
- Industry/Domain: Financial services
- Category: General Finance
- Company: Bloomberg
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- Harry8L
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(London, United Kingdom)