Bidding war participation
Multi-BidLong Target
Hold target through bidding contests; topping bids drive returns
Source: Event
Cash deal probability-weighted
Cash DealLong Target
Position size by P(close)*spread - P(break)*downside; classic merger arb math
Source: Calamos
Cash takeover spread capture
Cash DealLong Target
Long target near deal price; capture spread between current and offer price minus deal-fail risk
Source: Standard
Collar deal arb
Stock DealNeutral
Stock deals with collar; complex hedge ratio depending on acquirer price band
Source: Event
Convertible cushion in merger
HedgingLong
Long target convertibles instead of stock; downside cushion via bond floor if deal breaks
Source: AnalystPrep
Hostile bid hedge with options
DefenseLong Target
Long target hedge with OTM puts in case deal breaks; asymmetric payoff
Source: AnalystPrep
OTM call on acquirer hedge
DefenseNeutral
In stock deal, buy acquirer OTM calls to hedge short squeeze risk on break
Source: AnalystPrep
Spinoff parent rotation
SpinoffLong Spinoff
Buy spinoffs after distribution as parent-only mandates force-sell; mean reversion oversold
Source: Greenblatt
Stock-for-stock merger spread
Stock DealNeutral
Long target short acquirer at deal exchange ratio; capture residual spread
Source: Standard
Stub trade
SpinoffNeutral
Long parent short spinoff at right ratio; capture stub mispricing
Source: Special Sit
Variable exchange ratio arb
Stock DealNeutral
Floating ratio deals; rebalance hedge as acquirer price moves
Source: Event
An encyclopedia of publicly documented strategies for education. YCAI does not recommend, endorse, or trade any of these. Not investment advice.