Index Arbitrage definition
Index Arbitrage means a trading strategy in which pricing is based on discrepancies between a "basket" or group of stocks and the derivative index product (i.e. a basis trade) involving the purchase or sale of a "basket" or group of stocks in conjunction with the purchase or sale, or intended purchase or sale, of one or more derivative index products in an attempt to profit by the price difference between the "basket" or group of stocks and the derivative index products. While the purchase or sale of the stocks must be in conjunction with the purchase or sale of derivative index products, the transaction need not be executed contemporaneously to be considered index arbitrage. The term "derivative index products" refers to cash- settled options or futures contracts on index stock groups, and options on any such futures contracts.
Index Arbitrage. ’ means an arbitrage trading strategy involving the purchase or sale of a group of stocks in conjunction with the purchase or sale, or intended purchase or sale, of one or more cash-settled options or futures contracts on index stock groups or
Index Arbitrage means a strategy that primarily involves trading in securities or related futures contracts to profit from temporary discrepancies between the prices of the securities comprising an index and the theoretical futures prices of the same index.