Our working hypothesis is that an arbitrageur
with limited access to capital will try to exploit the basis trade opportunities that offer the best expected return per unit of risk capital.
are further legislative or judicial restrictions, appraisal arbitrageurs
Part II presents the results of our empirical investigation of appraisal activity, showing since 2011 a large increase in activity and the emergence of appraisal arbitrageurs
. Part III demonstrates that the merits appear to matter in the decision to file appraisal petitions.
need to determine how to set up the appropriate hedge position for collar offers.
The Jacklin arbitrage strategy is clearly impossible to execute if arbitrageurs
do not have access to the hidden retrade market.
might have been processing Ambac's derivative
Shleifer and Vishny (1997) examine the effect of intertemporal wealth constraints on the incentives of arbitrageurs
to eliminate mispricings between two securities with identical cash flows.
Even if their deviations were systematic, the effect on the average price would be slight if arbitrageurs
were alert for bargains.
Regulatory restrictions on arbitrage are directed at short sales, undertaken by an arbitrageur
when she believes the market price of a security is higher than its efficient price.
's portfolio because of the dediversification they
In the 1980s, arbitrageur
Ivan Boesky and junk-bond investor Michael Milken went to jail.