Proprietary stock-index arbitrage is but one aspect of program trading. Arbitrage will take place whenever there is an imbalance created in one or more markets that are similar.
Sentiment: NEGATIVE
Arbitrage proof has since been widely used throughout finance and economics.
If one asserts that buying customers below what they charge them is a corporate strategy, this is in essence an arbitrage game, and arbitrage games rarely last.
In essence, the stock market represents three separate categories of business.They are, adjusted for inflation, those with shrinking intrinsic value, those with approximately stable intrinsic value, and those with steadily growing intrinsic value.
Financial institutions like to call what they do trading. Let's be honest. It's not trading; it's betting.
Both from the standpoint of stocks and bonds, an investor wants to go where the growth is.
I had always been interested in markets - specifically, the theory that in financial markets, goods will trade at a fair value only when everyone has access to the same information.
The stock market is like a small row boat on a rough sea, bouncing around as it drifts, whereas the macro economy is like a large ocean liner, very ponderous and difficult to maneuver but without such a rough journey.
Electronic communications networks match trades between investors directly, without using a market maker or specialist as an intermediary.
One of the very nice things about investing in the stock market is that you learn about all different aspects of the economy. It's your window into a very large world.
You know what term you don't hear anymore? Arbitrage. The markets have gotten too efficient.