Product Description

The Complete Arbitrage Deskbook explains every aspect of the types, instruments, trading practices, and opportunities of modern equity arbitrage. It travels beyond U.S. borders to examine the worldwide opportunities inherent in arbitrage activities and demonstrates how to understand and practice equity arbitrage in the global professional environment. Written specifically for traders, risk managers, brokers, regulators, and anyone looking for a comprehensive overview of the field of equity arbitrage, this groundbreaking reference provides:  Details of the financial instruments used in equity arbitrage—stocks, futures, money markets, and indices  Explanations of financial valuation and risk analysis, tailored to the characteristics of the underlying position and market environment  Examples of actual arbitrage situations—presenting a real-life snapshot of equity arbitrage in action The Complete Arbitrage Deskbook is the only book to combine operational details with practical analysis of modern equity arbitrage. Concise in explanation yet comprehensive in scope, it provides an integrated overview of both the practices and the possibilities of the modern equity arbitrage marketplace.

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Product Details

• Amazon Sales Rank: #187766 in Books
• Published on: 2001-04-04
• Number of items: 1
• Binding: Hardcover
• 508 pages

Download Description
The Complete Arbitrage Deskbook is an overview and practical analysis of arbitrage.

Book Info
Combines practical analysis of modern equity arbitrage with operational details and concise explanation, giving the reader a thorough overview of the subject. Includes details of the financial instruments used in arbitrage, including stocks, futures, money markets, and indices. DLC: Arbitrage.

From the Back Cover

How to Understand­­and Take Advantage of­­Arbitrage Opportunities in Modern Financial Markets

The Complete Arbitrage Deskbook explains every aspect of the types, instruments, trading practices, and opportunities of modern equity arbitrage. It travels beyond U.S. borders to examine the worldwide opportunities inherent in arbitrage activities and demonstrates how to understand and practice equity arbitrage in the global professional environment.

Written specifically for traders, risk managers, brokers, regulators, and anyone looking for a comprehensive overview of the field of equity arbitrage, this groundbreaking reference provides:

• Details of the financial instruments used in equity arbitrage­­stocks, futures, money markets, and indices
• Explanations of financial valuation and risk analysis, tailored to the characteristics of the underlying position and market environment
• Examples of actual arbitrage situations­­presenting a real-life snapshot of equity arbitrage in action

The Complete Arbitrage Deskbook is the only book to combine operational details with practical analysis of modern equity arbitrage. Concise in explanation yet comprehensive in scope, it provides an integrated overview of both the practices and the possibilities of the modern equity arbitrage marketplace.

"Through the examination of actual examples and practical situations, the goal is to achieve an integrated view of arbitrage opportunities, precisely as a trader would see them..."
­­From the Introduction

When used with skill and caution, equity arbitrage­­despite relentlessly negative press and widespread popular misconceptions­­is a very low-risk strategy. It only becomes perilous in the hands of the inexperienced or overconfident. The Complete Arbitrage Deskbook provides anyone­­from capital market professionals to private traders to non-professionals with a serious interest in understanding Wall Street and its intricacies­­with a safe, solid foundation in the essential knowledge of equity arbitrage trading.

Before you can successfully employ equity arbitrage in the marketplace, you must first develop a complete understanding of its mathematics and practice. The Complete Arbitrage Deskbook covers every aspect­­mechanics, opportunities, risks, and valuation principles­­to help you move forward with knowledge and confidence. In-depth descriptions and demonstrations of each pertinent financial instrument­­stocks, futures and other derivatives, money market instruments including interest rate swaps, and stock indices­­show you what you need to know to manage these and where to focus your attention in terms of risk management. Detailed sections provide hands-on information about:

• Convergence continuums
• Cross-exchange listing
• Closed-end and convertible funds
• Holding companies
• Oscillators
• Mark-to-market versus theoretical valuation
• Valuation and random variables
• Risk management principles and tools, including value-at-risk
• Index arbitrage and absolute convergence
• Risk arbitrage and explicit convergence
• Pair trading and technical trading

Fallacies about what arbitrage is­­and is not­­are common among financial professionals. Concise yet comprehensive, The Complete Arbitrage Deskbook sidesteps fallacy to present fact. It is the only comprehensive overview of the opportunities and perils in the arbitrage markets­­and today's only complete overview and practical analysis of modern equity arbitrage.

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Customer Reviews

Pay attention in class.....
As a professional in the ETF business I highly recommend this book. The math is a little tough at points (makes me wish I studied with more conviction) but well worth the time it takes to assess. As a desk top reference book it's a must have. Some of the subject matter is for the hardcore Quant however, that's what makes it appealing to read and consequently study.

At least the author is funny
Quote, page 21:

"The strong [efficient market hypothesis], which has been made illegal in some countries by laws against insider trading, states that..."

unquote.

Now, personally I don't agree with the strong EMH, but that is has been made illegal is indeed news. Buffett and Munger must be smiling.

Unclear thinking = unclear writing.

One star.

Difficult, but comprehensive read
The Arbitrage Deskbook is thorough guide to arbitrage trading strategies. It is extremely comprehensive, covering arbitrage in all markets - from equities, to bonds, to commodity futures, and more. Most important is that it gets the reader to think like an arbitrageur and recognize the arbitrage opportunities presented by different situations.

This book is so comprehensive, that it does sacrifice some depth for breadth. Many complicated math problems are glossed over; it is difficult to understand some concepts thoroughly because the examples are not explained to great detail. If you see an important section, I suggest rereading it several times for better understanding.

In general, the author seems to expect the reader to have intermediate to advanced academic knowledge of finance. Familiarity with financial math and formulas will make this book easier to read. I suggest having some introductory college-level finance courses before reading, because the formulas presented may seem very cryptic if you've never seen them before reading this book.

In general, I think this is a great tool as a reference and for getting familiar with arbitrage. Don't expect to know everything by reading through it one time - there is too much information to remember on a single pass. Rather, try using this to learn how an arbitrageur seeks opportunity and then reference the topics later as you need them (i.e. keep this deskbook on your desk!). This is a great read for any student interested in entering proprietary trading or hedge funds.