March 23, 2009
Arbitrage is an exotic-sounding name for a group of strategies that try profit from price differences between securities or markets. For example, suppose a hedge fund trader noticed that a stock is trading at $11.98 in New York and $11.99 in London. He would buy as many shares as possible in New York, using leverage […]
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March 5, 2009
Last time, we examined how market-neutral hedge funds “hedge” market risk with offsetting long and short positions. We looked at market-neutral equity investing in particular. Investment professionals who hold jobs as market-neutral managers use other securities to hedge against market risk as well. Bond hedgers try to remove the effect of broad market moves from […]
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