But already clear, he said, is the need to rebuild and expand the firm's arbitrage operation.

Earlier this month it closed its high-flying bond arbitrage operation, citing losses.

Smith Barney dissolved it arbitrage operation.

Until then, Mr. Boesky's arbitrage operations had been conducted on a smaller scale.

Morgan Grenfell's American unit has reported a $14 million loss in its risk arbitrage operation in the recent market plunge.

The last one, in June, propelled him into the post of chief of Merrill Lynch & Company's expanding arbitrage operation.

Martin A. Siegel, the head of Kidder's arbitrage operations, pleaded guilty in February to misusing inside information.

Chemical had wooed Mr. Tabor away from Kidder, Peabody & Company, where he had been the second-ranking trader in its arbitrage operation for three years.

With competitive fixed-odds gambling being offered electronically, gamblers can sometimes create a Dutch book by selecting the best odds from different bookmakers, in effect by undertaking an arbitrage operation.

Those small-town qualities, though, are what Salem Abraham hopes will distinguish his hedge fund and stock-index arbitrage operation, based in a 1,000-square-foot office above the steakhouse, from his competitors.

L.F. Rothschild, which had been considered a major force in the business, cut back the amount of funds devoted to its arbitrage operations to one-tenth pre-crash levels, Wall Street players said.

Government investigators are likely to examine whether Mr. Siegel and other Kidder investment banking executives were too deeply involved in the firm's arbitrage operation, which traded in takeover stocks.

While Mr. Singh did not work for Mr. Rubin, he managed the same risk arbitrage operation as Mr. Rubin, though the desk's mandate is now broader.

In a move symbolic of his aggressive, restless personality, Mr. Tabor, who is now 33, left Kidder last May to take command of a new arbitrage operation at Chemical Bank.

Asked whether he would restore the brokerage firm's arbitrage operation, closed down after the crash by George A. Vonder Linden, its president, Mr. Weill replied: "I don't know yet.

It is a classroom training program on subjects related to the capital market, such as equities trading and settlement procedure, derivatives trading, day trading, arbitrage operations, technical analysis, financial planning, and compliance requirement.

Mr. Siegel was held in awe throughout the firm and Kidder sources say that, though he had no formal role in the arbitrage operation, his frequently offered suggestions on takeover stocks were almost always followed.

After a long search and interviews with several Wall Street executives, Mr. Soros picked Mr. Hennes, 42, to be in charge of hiring, compensation and other administrative chores and to oversee the arbitrage operation after the departure three months ago of the arbitrage specialists.

Competition in the marketplace can also create risks during arbitrage transactions.

This assumption is that the price of assets are unaffected by the arbitrage transactions.

Traditionally, arbitrage transactions in the securities markets involve high speed and low risk.

But the impact is always short in duration because the computers facilitate rapid arbitrage transactions.

Every group has a limited amount of money available for arbitrage transactions (possible due to self-imposed position limits).

But this would not amount to a classic arbitrage transaction since both positions were not taken on at the same time.

He examined whether a mispricing triggered index arbitrage transactions within a few minutes.

In comparison to the classical quick arbitrage transaction, such an operation can produce disastrous losses.

Section 5.2 discusses the practicalities of arbitrage transactions.

This premature cash flow will have to be financed, so altering the net present value of the arbitrage transaction.

The following steps illustrate the triangular arbitrage transaction.

This delayed cash flow will alter the net present value of an arbitrage transaction which involves buying shares.

Under the commission's action, restrictions on using the exchange's computerized trading systems for stock-index arbitrage transactions would be mandatory.

First Capital's filing, for instance, says it advises clients about "arbitrage transactions which have been specifically approved in advance by such client."

Pope and Yadav (1992) argued that potential arbitrageurs can be divided into groups, each with a different level of arbitrage transactions costs.

Finally, the management of the fund may be unfamiliar with futures trading, and be cautious about engaging in arbitrage transactions.

Electronic trading systems allow the three constituent trades in a triangular arbitrage transaction to be submitted very rapidly.

Merrill Lynch & Company said yesterday that, effective immediately, it would not execute index arbitrage transactions for client accounts.

Analysts said the big increase appeared to be related to arbitrage transactions by institutional investors in response to a merger announcement by Cisco.

The no-arbitrage condition requires that the overall profit from trading shares, debt and futures as part of an arbitrage transaction is zero.

The justification for this assumption is that the arbitrage transaction is riskless, and so repayment is guaranteed.

When the spread basis was sufficiently non-zero to cover the estimated transactions costs, simulated spread arbitrage transactions were initiated.

This indivisibility problem will tend to be smaller if each futures contract has a small nominal value, and the total value of the arbitrage transaction is very large.

The last line of the above table shows the extent to which indivisibilities have caused an imbalance between the value of futures and shares in the arbitrage transaction.

Formally, arbitrage transactions have negative skew - prices can get a small amount closer (but often no closer than 0), while they can get very far apart.