Time-Zone Arbitrage

Definition:

A form of stale price arbitrage where the pricing discrepencies are due to the primary markets for the underlying securities being closed at the times that the fund is traded. Note that time zone arbitrage is sometimes mistakenly used if it were a pure synonym for stale price arbitrage. These are not synonyms since stale prices can also be due to illiquid stocks or bonds that are not traded frequently.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Float

Currency: Exchange rate policy that does not limit the range of the market rate. Equities: Number of shares of a corporation that are outstanding and available for trading by the public, excluding... Read More

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