What's the difference between arbitrage and hedging?

Arbitrage


Definition:

  • (n.) Judgment by an arbiter; authoritative determination.
  • (n.) A traffic in bills of exchange (see Arbitration of Exchange); also, a traffic in stocks which bear differing values at the same time in different markets.

Example Sentences:

  • (1) In no time, Unilever’s shareholder register would have been populated by merger arbitrage funds.
  • (2) "Long term, the impact of this approach is that it should provide incentives for firms to dismantle corporate or capital structures that might have been developed to exploit tax or regulatory arbitrage," Myners said.
  • (3) Tom Gosling, reward partner at PricewaterhouseCoopers, said: "There is a wider question of differences in regulatory approach at the global level creating an uneven playing field, and a risk of geographic arbitrage in favour of jurisdictions that are perceived to be more lenient."
  • (4) HFTs employing latency arbitrage examine current market information to predict immediate price movements, essentially computing the best prices available before the exchange has even had a chance to update its price quote.
  • (5) In her lecture Cohen outlines the deal we have struck with the “surveillance-innovation complex”, involving a deeply worrying complicity between state and private actors - “a mutually satisfactory game of regulatory arbitrage”.
  • (6) This time, it relies on the kind of jurisdictional arbitrage familiar to so many lawless sites the world over: because its technical collection points are physically outside the US, it does not require authorization from either Congress or the Fisa court, even though the dragnet inevitably captures large amounts of data from Americans.
  • (7) More complex systems lead to a greater amount of arbitrage.
  • (8) For the sole purpose of repaying euro-denominated debts with a revived local currency, an official exchange rate between the euro and the local currency would need to be fixed with the ECB , under strict controls over such operations and capital flows and to prevent speculative arbitrage.
  • (9) Here are some tax techniques used by different companies over the years • Cross-border tax arbitrage • Hybrid debt instruments • Hybrid entities • Thin capitalisation • Thick capitalisation • Debt dumping • Loss buying • Outward domestication • Corporate inversions • Tax-efficient supply chain management • Intangibles fragmentation • Dividend buying • Company migrations • Dividend traps • Dutch sandwich • Swiss roundabout (long obsolete) • Value shifting • Defeased leasing • Capital allowance buying • Rent factoring • This article was amended on Thursday 5 February 2009.
  • (10) Better coordination has reduced the risk of regulatory arbitrage, and address the threat that banks will be, as the former Bank of England governor Mervyn King memorably put it , “international in life but national in death.” The US and the UK took the lead on reform, and Europe has been catching up.
  • (11) A financial transaction tax needs careful design, must be set at a modest rate without creating negative economic consequences and must minimise international tax arbitrage.
  • (12) Regulators and supervisors must protect consumers and investors, support market discipline, avoid adverse impacts on other countries, reduce the scope for regulatory arbitrage, support competition and dynamism, and keep pace with innovation in the marketplace.
  • (13) Privacy International said it had long suspected that members of Five Eyes have been playing "a game of jurisdictional arbitrage to sidestep domestic laws governing interception and collection of data".
  • (14) This requires a smart arbitrage by the news producers.
  • (15) The Globes have also found room for the unexpected reward: no one was tipping Richard Gere for the hedge fund thriller Arbitrage , or Jack Black for the mortician-murder comedy Bernie.
  • (16) It seems fanciful to imagine Britons who spent two weeks glued to the TV will, like Stakhanovites, suddenly meet higher norms in car production, healthcare and financial arbitrage.
  • (17) More surprises included a nod for Nicole Kidman as best supporting actress for her role in The Paperboy, and Richard Gere as best actor for Arbitrage.
  • (18) Trendon T Shavers, from KcKinney in Texas, was the founder and operator of "Bitcoin Savings and Trust" (BTCST), allegedly raised a total of 700,000 Bitcoins in 2011 and 2012 – then worth about $4.5m – for his scheme, claiming that he made his profits on market arbitrage.
  • (19) Moreover, the higher the gap between official interest rates and the higher rates on mortgage lending as a result of macro-prudential restrictions, the more room there is for regulatory arbitrage.
  • (20) A burgeoning trade in exploiting the anomalies of cross-border "tax arbitrage" was also curtailed.

Hedging


Definition:

  • (p. pr. & vb. n.) of Hedge

Example Sentences:

  • (1) But do you know the thing that really bites?” he pointed to his home, which was not visible behind an overgrown hedge.
  • (2) Private equity millionaires, wealthy hedge fund managers, some of the most successful bankers in financial history – they crowded into Cavendish’s Georgian offices.
  • (3) Miles will be replaced in September by former hedge fund economist Gertjan Vlieghe .
  • (4) The FSA, which was going to be given oversight of hedge funds, will instead be able to demand cooperation from them and from other financial firms it does not regulation during investigations into wrongdoing.
  • (5) However, while he considers the stock undervalued, the hedge fund boss said the software firm had missed a string of opportunities under Ballmer's "Charlie Brown management", referring to the hapless star of the Peanuts cartoon strip.
  • (6) This is a chancellor who has produced a budget for hedge fund managers more than for small businesses.” Corbyn made a point of mocking some of the chancellor’s grand rhetoric of recent years.
  • (7) Gold investors, hedge funds, multinational corporations and property-buying oligarchs all stand to gain.
  • (8) "After five years, we are in a worse place than when we started," wrote Jamil Baz, chief investment strategist at hedge fund GLG, in an eye-catching analysis last month.
  • (9) Former hedge fund manager Tom Steyer took out television ads on Tuesday, the night of Obama's state of the union address , attacking Keystone XL, and other wealthy Democratic donors wrote open letters to the White House seeking to shut down the project.
  • (10) Ruffer, who like Moulton called the recession early and has close links to hedge fund tycoon Crispin Odey, has taken a 29.5% stake in Better Capital.
  • (11) The boss of a successful US hedge fund has quit the industry with an extraordinary farewell letter dismissing his rivals as over-privileged "idiots" and thanking "stupid" traders for making him rich.
  • (12) It also severely restricts their investments in high-risk hedge funds and private equity ventures.
  • (13) Fitch also raised concerns that it could lose customers after the intervention of hedge funds, which are forcing the mutual Co-op Group of funeral homes, supermarkets and pharmacies to cede control of the bank.
  • (14) The Mail reported that prestigious internship positions in a range of industries (finance, hedge-fund work, fashion, media and so on) recently raised more than £20,000 for the Conservatives at the exclusive Black and White party .
  • (15) Tory hedge fund and multimillionaire donors will face no similar restrictions, leaving boards free to write hefty cheques backing the Tory party.
  • (16) On Monday, after months of intense talks with two US hedge funds, the Co-op Group – which also owns pharmacies, grocers and funeral homes – was forced to cede majority control of its bank as part of its battle to plug a £1.5bn capital shortfall and stave off nationalisation.
  • (17) On Wednesday, Seth Klarman, a billionaire hedge fund manager and sometime Republican donor, said he would work to get Hillary Clinton elected, condemning Trump’s “shockingly unacceptable” remarks and calling the candidate “completely unqualified for the highest office in the land”.
  • (18) The Democratic frontrunner said she had laid out an “aggressive plan to rein in Wall Street” and pointed to Super Pacs established by hedge fund managers to fight her candidacy.
  • (19) Hedge funds: US reforms are in line with the G20 pledge that funds above a certain size should be authorised and obliged to report data to supervisors.
  • (20) But in Britain demand is not just for a nicer house: it is for an investment, a hedge against inflation and old age, a golden gate to otherwise impossible wealth.

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