One day in August 2014 was a disaster for the arbitrage trade. The day was quickly dubbed “Arbageddon” or “arbageddon” (arbitrage + Armageddon). “On a day some traders dubbed ‘Arbageddon,’ hedge funds who bet on big corporate takeovers, known as arbitragers, suffered their worst rout in years after two deals fell apart and regulators indicated they may take steps to stymie others” was written in The Wall Street Journal on August 6, 2014.
“ARBAGEDDON” was the title of a blog that began on December 2, 2009. “When you catch yourself lying to yourself and you believe it - you know you are an arb. #arbageddon” was written by Angry Arb on Twitter on November 7, 2012. Risk Arb OFI used “#arbageddon” on Twitter on January 3, 2014.
In economics and finance, arbitrage (US /ˈɑrbɨtrɑːʒ/, UK /ˈɑrbɨtrɪdʒ/, UK /ˌɑrbɨtrˈɑːʒ/) is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs. For instance, an arbitrage is present when there is the opportunity to instantaneously buy low and sell high.
Armageddon (from Ancient Greek: Ἁρμαγεδών Harmagedōn, Late Latin: Armagedōn) will be, according to the Book of Revelation, the site of gathering of armies for a battle during the end times, variously interpreted as either a literal or symbolic location. The term is also used in a generic sense to refer to any end of the world scenario.
WEDNESDAY, DECEMBER 2, 2009
Are all the Quants, Algos, and HFT players going to melt the financial system down?
POSTED BY STEPHEN RADELJIC AT 7:14 PM
(First blog post.—ed.)
When you catch yourself lying to yourself and you believe it - you know you are an arb. #arbageddon
2:44 PM - 7 Nov 2012
@AngryArb feck arbageddon so much better than Arb-pocalypse. Feck.
3:50 PM - 7 Nov 2012
Risk Arb OFI
2013 recap of #MNA #riskarb in North America
More deals in value
No #arbageddon, tight spreads, some bidding wars
Decent year all in all
8:14 AM - 3 Jan 2014
The Wall Street Journal
Deals’ Demise Wrecks Funds’ Bets
Busted Buyouts and Warning by Obama Sting Big Investors; It’s ‘Arbageddon’
By ROB COPELAND and LIZ HOFFMAN
Aug. 6, 2014 7:43 p.m. ET
On a day some traders dubbed “Arbageddon,” hedge funds who bet on big corporate takeovers, known as arbitragers, suffered their worst rout in years after two deals fell apart and regulators indicated they may take steps to stymie others.
“Arbageddon’ may be the best @WSJ-coined market event since Flash Crash, http://on.wsj.com/1zVGlT0 via @RealRobCopeland @LizRHoffman
10:51 AM - 7 Aug 2014
THE WALL STREET JOURNAL
Deal breakdowns spell ‘arbageddon’ for M&A traders
By Rob Copeland and Liz Hoffman
Published: Aug 9, 2014 3:56 p.m. ET
On a day some traders dubbed “Arbageddon,” hedge funds that bet on big corporate takeovers, known as arbitragers, suffered their worst rout in years after two deals fell apart and regulators indicated they may take steps to stymie others.
The Sunday Telegraph (London)
December 28, 2014
Edition 1; National Edition
BUSINESS; Pg. 5
PIECES ON THE BOARD;
Mergers and acquisitions boomed in 2014. And despite a third of deals collapsing, chief executives are already planning next year’s moves, reports Ashley Armstrong
AbbVie’s £32bn takeover of Shire was also a painful failure, which led to merger arbitrage funds losing billions of pounds in a day that came to be known as “arbageddon”.
As deals rise, bankers warn of ‘bumpitrage’
by Stephen Gandel @stephengandel MARCH 20, 2015, 10:18 AM EDT
And it’s not just bumpitrage. There’s also concern about “appraisal arbitrage,” and of course “arbageddon,” which Weinberger says was his favorite word of 2014.
New York City • Banking/Finance/Insurance • Sunday, March 22, 2015 • Permalink