Federal Reserve Money Printing
It is understood that the US federal reserve creates money in order to maintain and elevate asset class prices. Provide examples of arbitrage opportunities that can leverage the fact the federal has to produce money such that the money creation process can be captured by speculators.
1. Interest Rate Arbitrage: Speculators can take advantage of interest rate disparities by borrowing at a lower rate, and investing the proceeds in a higher yielding security.
2. Currency Arbitrage: Speculators can exploit discrepancies in currency exchange rates by taking advantage of the changing price of currencies and capitalizing on any price discrepancies.
3. Stock Arbitrage: Speculators can buy stocks at a lower price in one market and sell them in another market for a higher price.
4. Futures Arbitrage: Speculators can take advantage of discrepancies in the price of futures contracts by buying a contract in one market and selling it in another market with a higher price.
5. Options Arbitrage: Speculators can take advantage of discrepancies in the pricing of options by buying an option in one market and selling it in another market with a higher price.
6. Credit Arbitrage: Speculators can take advantage of discrepancies in the pricing of credit products by buying a credit product in one market and selling it in another market with a higher price.
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