By Gary Durkin © 2005

In simplest of terms, Arbitrage means to exploit price differential.

Usually it meant looking at differing sources of an investment, and if there was a price difference between Source A and Source B - then investor / dealer / broker / manager would buy from lower priced source, and sell on higher priced source.

Example:- The price of Stock ABC was $20 per share on Exchange XYZ The price of same Stock ABC on another Exchange 123 - was $15

The dealer would buy stock from Exchange 123 for $15 - then sell on Exchange XYZ for $20 - making $5 per share profit (minus costs).

Typically price differential was very small - and trading had to be extremely quick and liquid - otherwise markets could go against you in a very short time.

Ten years ago Arbitrage was more commonplace than it is today - for a number of reasons.

Nowadays, Arbitrage still exists, but either in limited formats and availability as direct arbitrage, or more commonly in Hedge Funds.

Hedge Funds can have Arbitrage as one of their investment methodologies / strategies - and you will find that many of past Arbitrage Managers have switched across to Hedge Funds.

Even after LTCM (Long Term Capital Management) scandal / fiasco a few years ago - Hedge Funds continue to grow, and today are biggest and fastest growing investment style in World.

Remember, “If you don't ask, you won't get!”

Here are some useful tips that should help to cut your costs and put more money back into your pocket. At very least, it will make for an interesting read!

Telephone

At least twice a year review your phone bills for previous three months to see what local, long distance and international calls you normally make. Call several phone companies, to find an inexpensive calling plan that meets your needs.

Food

You can save hundreds of pounds a year by shopping at lower-priced food shops. Convenience stores often charge highest prices. You will spend less on food if you shop with a list. You can save hundreds of pounds a year by comparing price-per-pound or other unit prices on shelf labels. Stock up on those items with low per-unit costs.

Credit Cards

You can save as much as £300 or more each year in lower credit card interest charges by paying off your entire bill each month or by using a cheque, cash or debit card for purchases. If you are unable to pay off a large balance, pay as much as you can and switch to a credit card with a low annual percentage rate (APR). You can reduce credit card fees, which may add up to well over £30 a year, by getting rid of all but one or two cards, and by avoiding annual, late payment, and over-the-credit limit fees.

Petrol

You can save hundreds of pounds a year by comparing prices at different stations. You can save up to £20 a year on petrol by keeping your engine tuned and your tyres inflated to their correct pressure.

Car Rental