All articles tagged with #arbitrage
A Yale-led study of $13.76B in Polymarket trades finds roughly 3% of accounts captured 27% of profits, and as Wall Street liquidity grows, prices should become more accurate and mispricing opportunities rarer, likely shrinking the edge for most traders—perhaps below 1%—though niche traders and hedgers can still find value and markets may become more useful for data and risk management.
ERShares’ XOVR ETF, which holds SpaceX, is instituting a shareholder-protection plan that can reject Creation Units and impose up to a 2% redemption fee on redemptions to deter disruptive short‑term inflows ahead of SpaceX’s IPO. The rules apply to primary-market trading (creations/redemptions); secondary trading continues. XOVR has traded at a premium to NAV as inflows surge, a dynamic critics say could dilute long-term holders; analysts weigh the impact on rivals like RONB and NASA (Tema Space Innovators ETF).
The column argues that markets are driven by conflicting certainties: investors believe they’re right while assuming others are equally informed, yet the no-arbitrage principle and markets’ role as prediction engines still govern pricing, exposing a pervasive cognitive dissonance in investing.
Ethereum's recent rally is primarily driven by derivatives trading and arbitrage strategies, with minimal actual buying in the spot market, raising concerns about its sustainability and vulnerability to sudden reversals without increased genuine demand.
Jane Street's secretive trading strategy in the Indian options market, which generated billions in profits, led to an investigation by India's SEBI, resulting in a temporary market ban and seizure of assets. The case highlights complex trading practices like arbitrage versus manipulation, especially in India's unusually large and retail-driven options market, raising questions about market efficiency and regulatory oversight.
The Federal Reserve is ending its Bank Term Funding Program, which had provided an opportunity for banks to profit from arbitrage. The program, set up during last spring’s regional banking crisis, will conclude on March 11, and new loans made before then will be at no lower than the interest rate on reserve balances. The decision comes as the program's usage reached $161.5 billion, prompting questions about its impact on regional bank stock prices and potential market sentiment.
The Federal Reserve has announced the cessation of new loans through the Bank Term Funding Program (BTFP) and has closed the arbitrage opportunity that allowed banks to exploit the program for profit. The BTFP, created in response to the 2023 bank-panic and liquidity crisis, had inadvertently allowed banks to borrow at lower rates and earn risk-free income. The Fed's decision to adjust the interest rate on new loans effectively shuts down this loophole, marking the end of the arbitrage opportunity.
The Federal Reserve's Bank Term Funding Program, set to expire on March 11, is causing a stir in the markets as traders rush to take advantage of a risk-free arbitrage opportunity before it ends, following signals from the Fed's top bank watchdog that the central bank is unlikely to renew the key lending facility created during last year's banking crisis.
AMC Entertainment's settlement with plaintiffs over a plan to issue more stock has created an attractive trading opportunity for arbitragers. The settlement allows the company to raise capital and convert its AMC Preferred Equity (APE) units into common stock.