credit protection and hedge such a position through purchasing delta shares. Who uses it? Why? Fixed-income arbitrage is a strategy that involves a substantial level of risk. The strategy itself provides relatively small returns that can be offset with huge losses given varying market conditions and poor judgement calls. Due to the risk-return nature of the strategy, it is not often used by common investors. It is more often used by asset rich groups, such as hedge funds and investments banks that have significant capital that can be deployed to capitalise on the smaller-riskier returns. References Arbitrage Financial markets Corporate development