GO
Loading...

Merger Arbitrage: CNBC Explains

For various reasons, during an acquisition financed by stock, shares of the two companies involved may not trade at the correct ratios, opening an arbitrage opportunity. How does simple merger arbitrage work and how can you take advantage of it? Salman Khan of the Khan Academyruns through a hypothetical example.

From this video, you’ll understand:

  • A trading strategy to take advantage of discrepancies in price
  • Important assumptions when using simple merger arbitrage

Contact CNBC Explains

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Latest Special Reports

  • Lake Life

    CNBC presents a special report on how architecture, innovation and infrastructure are providing solutions to urban problems.

  • Go inside the new technologies, evolving markets and tricky geopolitics influencing the world's growing energy needs.

  • Tips on the best-performing portfolio strategies and global market trends that can help you become a smarter investor.