Risk Arbitrage is a form of trading whereby the risk arbitrageur attempts to profit from issues involved in merger/acquisitions. The underlying rationale is that the current price after the announcement is still below the bid price. Also, the company may find itself subject to other bids for its stock in excess of the initial announced bid. These price differentials are the arbitrage part. The risk is that other bids do not materialize or the initial announcement fails due to other considerations.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). risk arbitrage. Retrieved September 21, 2026, from http://smartdefine.org/risk_arbitrage/definitions/1162630 |
| Chicago | Barry Goldsmith. 2010. "risk arbitrage" http://smartdefine.org/risk_arbitrage/definitions/1162630 (accessed September 21, 2026). |
| Harvard | Barry Goldsmith 2010, risk arbitrage, Smart Define, viewed 21 September, 2026, <http://smartdefine.org/risk_arbitrage/definitions/1162630>. |
| MLA | Barry Goldsmith. "risk arbitrage" 21 October 2010. Web. 21 September 2026. <http://smartdefine.org/risk_arbitrage/definitions/1162630> |