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  getting started.
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  -How investing in the stock
  market works
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  -How bond investing works
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Economics
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Advanced Investing Topics
  -This section covers topics
   like futures and options

Risk Arbitrage - Definition
Below, you'll find a definition of this investing term...

Definition:  The simultaneous purchase of stock in an acquired company and the sale of stock in a purchasing company.

TeenAnalyst Advice: Usually when a company purchases another company, they see their stock decline slightly.  The company being acquired is purchased at a premium, so their stock usually appreciates.  Risk arbitrageurs are people who try to profit from this transaction.

This usually isn't something to be done by a regular investor because the stocks move right when these acquisitions are announced, so you'd miss the boat.

 

Related Sections on Our Website

Investing - Learn more about investing basics and strategies.

Stocks - Learn about investing in the stock market.

 

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