Risk Arbitrage is an event driven trading strategy. It attempts to generate profits by taking a long position in the stock of a target company and combining it with a complimentary short position in the stock.
The event in this case may be a merger, buy back, takeover open offer and or any such corporate action wherein there is a possible arbitrage in prices available and the downside risk that is the loss is non existent, the return in this case is not fixed and may vary. We will help you identify the opportunity and build and manage the strategy in maximizing the returns thereon.
Risk Arbitrage in IDFC Bank Ltd and Capital First Ltd. The merger ratio is for every 10 Shares of Capital First you will be getting 139 shares of IDFC Bank Ltd.
The expected yield in this is up to 3.5% for the FNO Contract Ending as on 27 December 2018.