RISK ARBITRAGE
The attempt to profit by merger, acquisition, hostile takeover, recapitalization, spinoff, or other transactions based on the advice of a risk arbitrageur who analyzes future opportunities.
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The attempt to profit by merger, acquisition, hostile takeover, recapitalization, spinoff, or other transactions based on the advice of a risk arbitrageur who analyzes future opportunities.
The spreading of exposure by combining firms with similar risk factors by risk pooling. Similar to group captive this is a retention vehicle.
Expected future claims covered by reserves paid by an insurer.
Selling inventory to pay off an asset conversion loan that is secured or unsecured usually obtained for a product that is seasonally demanded. AKA asset conversion loan.
A regulation imposed by the securities and exchange commission that allows securities to be registered once every two years causing advance registration of securities. AKA rule 415 registration.
An option that allows the buyer to lock in the profit before the possible loss occurs. Refer to cliquet, ladder, fixed strike shout, and floating strike shout option.
The ability of a company to get returns to shareholders. This is done when a company cannot decide on new opportunities that will generate profits for shareholders. Refer to cutting the melon
A UK GILT STRIP security known as a Sterling Transfer Accruing Government Security.
Applying reductions equally to a depreciable assets value in relation to predictions of its anticipated maturity. Refer to accelerated depreciation.
Debt where securites are issued directly by a company not a trust. They mature in 10 to 30 years and must be approved by an insurance regulators.
When a hedge is discounted using present value because the value changes daily.
Mapping interest rates across time on a yield curve. Refer to expectation, liquidity preference, and market segmentation theory.
A spread that takes advantage of volatility or percieved price in the forward market. This happens when options are traded with the same strike price but different maturity dates. AKA calendar spread
The potential for a credit rating of a company to go from one class to another.
When a take over happens because stockholders are offered a great price for a first cut off date. The remaining holders get a less attractive deal. Refer to anyandall bid and fair
Stock that is available to be sold through corporate charter but isn’t.
The price changes that occur compared to a %1 volatility change.
The process of comparing value to variable changes in the market. Part of the markov process. It is used in pricing options.
a term used to refer to a table in progress that is not yet able to be used in rating.
When an industrial company issues a paper. Refer to financial paper.