Finance & Investment Glossary
This Finance & Investment Glossary is what every arbitrageur needs to know about trading event driven investment strategies such as merger arbitrage. The construction and execution of trading a merger arbitrage investment strategy often requires researching official documents that frequently refer to the following financial terminology. Traders can also find these terms in other popular hedge fund investment strategies and aspects of personal finance and stock market trading. We explain these essential business terms and financial concepts in a concise and simple manner. In many cases, we also provide examples and links to additional resources.
We refer to this Glossary often throughout our strategy and commentary categories. Frequent references are also made within our merger arbitrage spread tracker. These terms also feature heavily in our comprehensive merger arbitrage book list and academic research resource pages. We highlight in-text glossary terms in standard blue font with a dashed underline. This makes them easy to access without interrupting the flow of the text. In addition, the user has the option of hovering the mouse pointer over the highlighted glossary item to see an instant snippet of the definition.
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- 5 10 40 Rule
- Accredited Investor
- Accretive
- Acquirer
- Acquisition
- Acquisition Premium
- Acquisition Proposal
- Active Arbitrage
- Activism
- Activist
- Affiliate
- Alpha
- Alternative Investment
- Annual General Meeting
- Annualized Return
- Antitrust
- Appraisal Rights
- Arbitrage
- Arbitrageurs
- Asset Sale
- Basis Points (BPS)
- Bear Hug
- Beta
- Bidding War
- Binary Outcome
- Board of Directors
- Break-Up Fee
- Bumpitrage
- Business Judgment Rule
- Buyout
- Calendar Spread
- Call Option
- Cash Deal
- Cash Election
- Casual Pass
- CFD
- CFD Arbitrage
- CFIUS
- CMA
- Collar
- Company Material Adverse Effect
- Competition and Markets Authority
- Confidentiality Agreement
- Consummate
- Contingent Value Right
- Contract for Difference
- Contracts For Difference
- Control Premium
- Convertible Bond Arbitrage
- Covenant
- Cryptocurrency
- Customary Closing Conditions
- CVR
- DCP
- Deal Closing Probability
- Debt Financing
- Delaware General Corporation Law
- Depository Trust Company
- Determination Notice
- DGCL
- Dilution
- Discounted Cash Flow
- Dissenters Rights
- Dissenting Shareholder
- Dissenting Shares
- Diversification
- Divestiture
- Dividend
- Dividend Yield
- Don't Ask, Don't Waive
- Double Trigger
- Drop-Dead Date
- Due Diligence
- Dutch Auction
- Dutch Tender
- EBITDA
- Effective Time
- ERISA
- ETF
- Event Driven Investment
- Exchange Act
- Exchange Ratio
- Exchange Traded Fund
- Expected Completion Date
- Extraordinary General Meeting
- Fair Value
- Fairness Opinion
- FCC
- Federal Trade Commission
- FERC
- Fiduciary Duty
- Five Forces
- Flex Provision
- Floor Price
- Flowback
- Forecast Completion Date
- FOREX
- Form 8.3
- Friendly Merger
- Friendly Takeover
- GAAP
- Garbatrage
- Go-shop
- Going Private
- Greenmail
- Hart-Scott-Rodino
- Hedge Fund
- Highly Confident Letter
- Horizontal Merger
- Hostile Bid
- Hostile Takeover
- Householding
- HSR
- In Play
- Indenture
- Index Fund
- Initial Public Offering
- Intervening Event
- Intrinsic Value
- Investability
- Investment
- Investor
- ITM
- Joint Venture
- Junk Bonds
- Just say no
- Kohlberg Kravis Roberts
- Letter of Transmittal
- Leverage
- Leveraged Buyout
- LIBOR
- Liquidity
- Lock Up
- M&A
- MAC Clause
- Management Buyout
- Matching Rights
- MBO
- Merger
- Merger Agreement
- Merger Arbitrage
- Merger Arbitrage Limited
- Merger Consideration
- Merger Sub
- Mergers & Acquisitions
- Minimum Condition
- Minimum Tender Condition
- Mortgage
- No-shop
- Offer Price
- Offering Circular
- Offering Memorandum
- OTM
- Outside Date
- Over-the-Counter
- Pac-Man Defense
- Pairs Trading
- Parent
- Parent Material Adverse Effect
- People Pill
- Phantom Stock
- Plain Vanilla
- PMI
- Poison Pen
- Poison Pill
- Poison Put
- Post Earnings Announcement Drift
- Pre-arbing
- Precedent Transaction Analysis
- Price Earnings Ratio
- Private Equity Firm
- Private Mortgage Insurance
- Proxy
- Proxy Advisory Firms
- Proxy Fight
- Proxy Statement
- Purchaser
- Put Option
- Quick Ratio
- Regulation S
- Relative Value
- Reverse Arbitrage
- Reverse Break-Up Fee
- Reverse Termination Fee
- Risk Arbitrage
- Risk Reversal
- SAMR
- Scalping
- SEC
- Secondary Market
- Securities Act
- Share Repurchase
- Shareholder Rights Plan
- Shark Repellent
- Short Form Merger
- Short Position
- Shorting
- Signaling Theory
- Simple Spread
- Special Purpose Acquisition Company (SPAC)
- Special Situations
- Specific Performance
- Spinoff
- Spread
- Spread Betting
- Squeeze Out
- Staggered Board
- Stakeholder
- Stalking Horse
- Stand Alone Company
- Standstill Agreement
- State Administration for Market Regulation
- Statistical Arbitrage
- Stock Deal
- Stock Exchange
- Stock Market
- Stop, Look and Listen
- Stop-Loss Order
- Strategic Alliance
- Street Name
- Stub Period Dividend
- Subsidiary
- Superior Proposal
- Supermajority Provision
- Surviving Corporation
- Synergies
- T-Bills
- T20 Portfolio
- Tail Policy
- Takeover Panel
- Target
- Tender Offer
- Term Sheet
- Termination Fee
- Toe Hold
- Top Up Option
- UCITS
- Vertical Merger
- Virtual Special Meeting
- Volatility
- VWAP
- Warrants
- White Knight
- White Squire
- Williams Act
- Winners Curse
- Withdrawal Rights
- Yield