Learning Arbitrage

April 3, 2006

I have a conceptual understanding of arbitrage and have started looking at it actively. The first time I looked at it seriously was before the reliance de-merger. However I was not too confident of the opportunity and as a result did not commit much capital to it.

I just came across these two posts by prof. Bakshi which talks of two such arbitrage opportunities

http://fundooprofessor.blogspot.com/2006/04/nothing-ventured-something-gained.html

http://fundooprofessor.blogspot.com/2006/04/creating-free-warrants-case-of-jsw.html

I think Prof bakshi has explained the two situations in a fair amount of detail and anyone wanting to learn about arbitrage opportunities should read these two posts.

I am looking for some books on arbitrage and till date have found a bit of an explaination on it in warren buffett’s letters to shareholders and in Benjamin graham’s books – ‘The intelligent investor’ and ‘Security analysis’. However I am still looking for some books which covers this topic in detail, especially risk arbitrage, M&A arbitrage etc.

If anyone of you know a good book on it please leave me a comment. I would really appreciate it.

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