Arbitrage is not simply the act of buying a product in one market and selling it in another for a higher price at some later time. The transactions must occur simultaneously to avoid exposure to market risk, or the risk that prices may change on one market before both transactions are complete. In practical terms, this is generally possible only with securities and financial products that can be traded electronically, and even then, when each leg of the trade is executed the prices in the market may have moved. Missing one of the legs of the trade (and subsequently having to trade it soon after at a lower price) is called 'execution risk' or more specifically 'leg risk'.
In the simplest example, any good sold in one market should sell for the same price in another. Traders may, for example, find that the price of wheat is lower in agricultural regions than in cities, purchase the good, and transport it to another region to sell at a higher price. This type of price arbitrage is the most common, but this simple example ignores the cost of transport, storage, risk, and other factors. "True" arbitrage requires that there be no market risk involved. Where securities are traded on more than one exchange, arbitrage occurs by simultaneously buying in one and selling on the other.
| Directed by | Nicholas Jarecki |
|---|---|
| Produced by | Laura Bickford Kevin Turen Justin Nappi Robert Salerno Mohammed Alturki |
| Written by | Nicholas Jarecki |
| Starring | Richard Gere Brit Marling |
| Music by | Cliff Martinez |
| Cinematography | Yorick Le Saux |
| Studio | Green Room Films Treehouse Pictures Artina Films |
| Distributed by | Lionsgate |
| Release date(s) |
|
No comments:
Post a Comment