index arbitrage

Definition of "index arbitrage"
  1. A trading strategy that aims to profit from price differences between a stock index futures and its constituent stocks through simultaneous sales and purchases
How to use "index arbitrage" in a sentence
  1. The investor successfully employed index arbitrage to capitalize on the price difference between the futures contract and the index itself.
  2. Many financial firms use high-speed computers to execute index arbitrage strategies.
  3. By noticing the intermarket spread, he decided to engage in index arbitrage to maximize profits.

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