Is there a difference between dividend exposure vs repo exposure for Index Arbitrage?
What is repo exposure for index arbitrage? what’s the difference between Repo exposure vs dividend exposure for Index Arbitrage?
Repo is the repositioning rate which is the rates on Federal Funds. When it moves down there is chances of your short term bond holding to go up in value. So anticipating or forecasting these rates you can gain better yield than the risk free rate in the short run.
Dividend exposure is when at the announcement of dividends the value of the stock goes down by that amount and if you short sell anticipating this you can get an yield equal to the dividend yield.
When you predict these movements you get related movements on the Index pointing these insturments and you can make profits made on correctly calling the directions. This is called Index arbitrage.
Does anyone know anything about sports arbitrage or financial arbitrage software?
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Repo is the repositioning rate which is the rates on Federal Funds. When it moves down there is chances of your short term bond holding to go up in value. So anticipating or forecasting these rates you can gain better yield than the risk free rate in the short run.
Dividend exposure is when at the announcement of dividends the value of the stock goes down by that amount and if you short sell anticipating this you can get an yield equal to the dividend yield.
When you predict these movements you get related movements on the Index pointing these insturments and you can make profits made on correctly calling the directions. This is called Index arbitrage.
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