drop, subsequently making it more difficult for individuals or groups to borrow. Volatility Arbitrage Fixed-income volatility arbitrage is a strategy designed to profit from pricing differences in a fixed income security's forecasted future price-volatility and the implied volatility of options based on the same asset. Similar to the case of finding the real price of a stock, in this strategy the arbitrageur must make a judgement on whether implied volatility of a security is overpriced or under-priced. An example of this would be in the opportunity in which a stock option is considerably under-priced because the implied volatility of the asset was too low, in a move to profit off the mispricing the arbitrageur would subsequently choose to open a long call option combined with a short position in the underlying stock. Capital Structure Arbitrage Capital structure arbitrage is a strategy used globally in finance, designed to profit from current market mispricings in security classes issued from a single company. It is in the mispricing of these securities that arbitrageurs attempt to profit from. Such mispricings occur when an arbitrageur buys undervalued securities and sells overpriced securities, like other arbitrage strategies. This strategy is specifically designed to profit from the mispricing of a company's debt and its other securities. In employing this strategy it is common for arbitrageurs to use a structural model to measure the richness and cheapness of credit default swap spreads. The structure model is designed to calculate the fair value of such credit default swap spreads (CDS spread) based on a Company's debt and other securities. If the model indicates that the current market CDS spread is materially different than that of the predicted spread, the arbitrageur must decide whether the market misprices equity value of the CDS market is not producing fair prices. different mispricing cases, in both instances the arbitrageur will attempt to profit from identifying such mispricings by selling credit protection and delta-hedge it by selling short delta equities and expect convergence to occur. Assuming that CDS bid-ask spreads and equity prices move in the same direction, if either the CDS spread widens or the equity price increases, the equity position can cushion the loss on the CDS position. Similarly, the CDS position can cushion the loss on the equity position. In the case that the CDS spread is materially lower than the predicted spread from the structured model, then one would buy