FOX Translator
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You're at a fruit market. But, instead of just being able to buy apples at this fruit market, you can also sell fruit.
You're not a farmer, so you come to the market to buy some apples and you see two fruit stands. Fruit Stand A on the left
is buying and selling apples at 50 cents apiece. However, Fruit Stand B on the right is buying and selling apples at 53 cents
apiece. People are buying and selling apples at these two stands all the time, and the price at a stand could change at any
moment. But, while you're there, apples are 50 cents and 53 cents, respectively.
You're a smart person, and you quickly
realize that you can buy apples from Stand A and then sell them across the street to Stand B and make a 3-cent profit. But
you have to do it now; you can't wait. So you buy all the apples at Stand A and then run to sell them all to Stand B.
Congratulations.
You've committed fruit-stand arbitrage.
Arbitrage is exactly that: the selling of the same item between two different
markets to make a profit off the mathematical differences in price. However, it's not apples that are traded--the goods in
question are usually stocks, currencies and other securities. Arbitrage happens when you get a stock, usually a common one
like General Electric that's traded on multiple markets (Japan, Hong Kong, U.S., etc¿). The stock is usually worth within
fractions of a penny the same on each of those markets. However, there are often some minor variations.
People who
participate in arbitrage take advantage of these variations--and make a ton of money doing it. As seen in the fruit stand
example, you can make a "riskless profit" from buying and selling apples between different markets.
There are some
big hedge funds that make almost all their money off arbitrage. But, despite this simple example, arbitrage is mathematically
complex--and involves a good portion of risk if you don't know what you're doing. You probably won't be able to participate
in arbitrage directly, but you can always invest in a mutual fund that does.
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Saturday, July 05, 2008
RNC: They Said It Flashback! Hillary Was Right?!
Comtex
WASHINGTON, July 5, 2008 /PRNewswire-USNewswire via COMTEX/ ----In March, Sen. Clinton Questioned Obama's Pledge To Withdraw Troops From Iraq In 16 Months, Saying It Was Words You Can't Rely On. Sen. Clinton: "Senator Obama promises to withdraw from Iraq within 16 months. But his top foreign policy adviser said he's not really going to rely on that plan. I guess that plan is just words, too. We need a president who will solve problems. Who will fight for our families long after the speeches are over and the cameras are gone. That's the choice in this campaign: Solutions you can rely on -- versus words you can't." (Mark Halperin, "Clinton Remarks On Obama Iraq And Environmental Policies," Time's "The Page" Blog, thepage.time.com, 3/11/08)
(Logo: http://www.newscom.com/cgi-bin/prnh/20080519/RNCLOGO )
Hillary Was Right?!:
On Thursday, Obama Said He Would Slow Troop Withdrawals If Commanders On The Ground Said Troops Could Not Safely Be Removed At A Pace Of One To Two Brigades Per Month. Question: "If the general says to you, we can't safely and responsibly move one to two brigades out a month -" Obama: "[I]'ve said before, and this was true during the heat of the primary, it was true when we posted this Web site. I have always said, and again, you can take a look at the language, that as commander-in-chief, I would always reserve the right to do what's best in America's national interests. And if it turned out, for example, that, you know, we had to, in certain months, slow the pace because of the safety of American troops in terms of getting combat troops out, of course we would take that into account. I would be a poor commander-in-chief if I didn't take facts on the ground into account." (Sen. Barack Obama, Press Conference, 7/3/08)
In March 2008, Obama Said He Would "Immediately Begin To Remove Our Troops From Iraq And Have Them Out In 16 Months." "In order to end this war responsibly, I will immediately begin to remove our troops from Iraq. We can responsibly remove one to two combat brigades each month. If we start with the number of brigades we have in Iraq today, we can remove all of them 16 months." (Sen. Barack Obama, Remarks On Iraq, Fayetteville, NC, 3/19/08)
A Product Of The RNC Research Department Paid for by the Republican National Committee. 310 First Street SE, Washington, D.C. 20003 - (202) 863-8500 - www.gop.com Not authorized by any candidate or candidate's committee.
SOURCE Republican National Committee
http://www.gop.com
Copyright (C) 2008 PR Newswire. All rights reserved
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