A hands-on options curriculum covering real trading concepts. Read the lessons, work through examples, and test your knowledge.
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Lesson 0: 19.0: Overview of Global Arbitrage & Event-Driven Strategies
Explore the spectrum of global arbitrage, event-driven catalysts, law of one price, and risk-adjusted spread capture.
1. The Mechanics of Arbitrage and Event-Driven Trading
Arbitrage exploits price discrepancies between identical or financially equivalent instruments across different markets or forms.
Pure Arbitrage takes riskless simultaneous long and short positions to capture pricing inefficiencies, enforcing the Law of One Price.
★ Event-Driven Trading: Positions taken ahead of or during corporate catalysts (M&A, bankruptcies, restructuring, spin-offs) where mispricings arise from market uncertainty.
2. The Event-Driven Strategy Taxonomy
Includes Merger Arbitrage, Convertible Bond Arbitrage, Distressed Debt, Special Situations, and Index Rebalancing Arbitrage.
Click to enlargeOptions Structure Exploration
Options are contracts cleared in the bid-ask auction market. Interact with the Order Book below to understand how buy offers (bids) and sell offers (asks) intersect, and inspect the structural breakdown between Call and Put contracts.
Limit Order Book & Spread Interface
Hover over ASK or BID to dissect the auction market dynamics.
Right to Buy
- Outlook: Bullish (Goes up)
- Risk: Capped to premium paid
- Profit: Scales as stock surges
Right to Sell
- Outlook: Bearish (Goes down)
- Risk: Capped to premium paid
- Profit: Scales as stock falls
KNOWLEDGE RECONNAISSANCE
What fundamental economic law is enforced by financial market arbitrageurs?
More lessons in this module
- 19.1: Merger & Risk Arbitrage (M&A Deal Structures & Break Spreads)
- 19.2: Convertible Bond Arbitrage & Delta-Neutral Volatility Trading
- 19.3: Fixed Income & Yield Curve Arbitrage (Treasury-Swap Spreads, Basis Trades)
- 19.4: Index Arbitrage & Program Trading Mechanics
- 19.5: Distressed Debt, Restructuring, & Bankruptcy Investing
- 19.6: Corporate Actions & Special Situations (Spin-offs, Tender Offers, Rights Offerings)
- 19.7: Cross-Border & ADR Arbitrage (FX & Capital Control Dynamics)
- 19.8: Quantitative Event-Driven Strategies (Earning Surprises, NLP Catalyst Feeds)
Signal Desk is where you practice this on real stocks: real option chains (about 15 minutes delayed), the Trade Check and a paper-trading account that risks no real money. Join to add it, your progress tracking and PDF downloads.