Ergo Inc

Description

These terms indicate when index arbitrage program trading activity could occur and, hence, could produce sudden and possibly sharp market movements. Foreknowledge of the likelihood of an adverse program trade can help investors determine the wisdom of initiating long or short positions in stocks, index futures, Exchange Traded Funds (ETFs), and options. Buy programs occur when the futures market is over-valued relative to the stock market and consists of the index futures being sold and the stocks in the index being bought.

Index arbitrage is a form of program trading activity that can produce sudden and possibly sharp market movements. Foreknowledge of the likelihood of an impending program trade can help investors with the timing of initiating either long or short positions in stocks, index futures, Exchange Traded Funds (ETFs), and options. Specifically, investors could benefit from knowing the conditions under which program trades might occur by either avoiding trades in the opposite direction or taking trades in the same direction.

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