arbitrageurs
Market gap profiteers
Arbitrageurs are traders who profit from price differences in different markets—buying an asset where it's cheaper and simultaneously selling where it's more expensive.
The practice, called arbitrage, exploits temporary inefficiencies: Arbitrageurs moved quickly when the stock traded at different prices on two exchanges.
In corporate finance, arbitrageurs often buy shares of takeover targets, betting the deal will close at the announced price.
Incorrect cost assignment
- inefficiencySuboptimal use of resources
- spreadsDistributes over area
- convergenceProcess of approaching sameness
- divergenceSeparation from common origin
parity · dislocation · triangular · statistical · merger · convertible · cross-border · index
Noncommittal maneuvering
- algorithmicFollowing programmed steps
- quantitativeConcerning measurable amounts
- backtestingValidating strategies using history
- optimizationMaximizing efficiency or performance
execution · leverage · scalping · pairing · correlation · high-frequency · momentum · diversification
Tradeable financial assets
- commoditiesTradeable raw materials
- futuresContracts for future delivery
- optionsAvailable courses of action
- derivativesThings derived from another
equities · bonds · fixed-income · forex · cryptocurrencies · ETFs · OTC · clearinghouses
Selfish use of others
- gainPositive return received
- windfallUnanticipated lucky gain
- extractionAct of removing
- premiumAdded cost for better
return · yield · alpha · surplus · advantage · margin · lucrative · enrichment
Those betting on markets
- dealersThose who sell merchandise
- brokersTransaction intermediaries
- investorsThose who commit capital
- day-tradersShort-term securities speculators
scalpers · stockbrokers · quants · jobber · liquidator · intermediary · operator · wholesaler
Other side in deals
- slippageGradual loss or decline
- timingArt of choosing moments
- regulatoryInvolving official oversight
- complianceAdhering to requirements
mispricing
Incorrect cost assignment
- inefficiencySuboptimal use of resources
- spreadsDistributes over area
- convergenceProcess of approaching sameness
divergence · parity · dislocation · triangular · statistical · merger · convertible · cross-border · index · spatial
hedging
Noncommittal maneuvering
- algorithmicFollowing programmed steps
- quantitativeConcerning measurable amounts
- backtestingValidating strategies using history
optimization · execution · leverage · scalping · pairing · correlation · high-frequency · momentum · diversification · systematic
securities
Tradeable financial assets
- commoditiesTradeable raw materials
- futuresContracts for future delivery
- optionsAvailable courses of action
derivatives · equities · bonds · fixed-income · forex · cryptocurrencies · ETFs · OTC · clearinghouses · exchanges
exploitation
Selfish use of others
- gainPositive return received
- windfallUnanticipated lucky gain
- extractionAct of removing
premium · return · yield · alpha · surplus · advantage · margin · lucrative · enrichment
speculators
Those betting on markets
day-traders · scalpers · stockbrokers · quants · jobber · liquidator · intermediary · operator · wholesaler
counterparty
Other side in deals
- slippageGradual loss or decline
- timingArt of choosing moments
- regulatoryInvolving official oversight