discount arbitrage
Definition
A trading strategy in which an investor buys an option and at the same time buys or sells the underlying strategy. The strategy is executed in one of two ways. An investor may buy a call option at a discount and sell the underlying security, or an investor may buy a put option at a discount and buy the underlying security. Discount arbitrage is a covered option strategy.
Related Articles
- The Difference between Financial Advisors and Financial Analysts *
- An Explanation of Home Equity and the Related Loans *
- "Buy Put" Stock Option Investment Strategy *
- Categories of Stocks *
- Roth IRAs: Contributions, Withdrawals, Distributions etc. *
- Explanation of the Balance Sheet *
- Forex Trading Based On News Releases *
- Introduction to Stocks *
Related Videos
http://www.businessdictionary.com/definition/discount-arbitrage.html
