10 Strategies Hedge Funds Use to Make Huge Returns

7. Equity Arbitrage

Equity Arbitrage is a hedge fund investment strategy in which the fund usually tries to take over the ones that are done with, through stock or cash. The idea is that while the acquiring company proposes to trade the acquired company’s share, a hedge fund shortly sells the acquiring company’s share, and simultaneously purchases shares in the acquired company. By purchasing at a lower price and waiting for the transaction to be done, the hedge fund profits from using this strategy.