LEVERAGED BUYOUT (LBO)
Leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition.
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Acquisitions in trading refer to the purchase of one company by another, often impacting stock prices and market dynamics. Traders analyze acquisitions for potential arbitrage opportunities, where stock prices may diverge from buyout offers. Mergers can create volatility, influencing options pricing and sector performance. Understanding acquisition strategies, regulatory risks, and financial health helps traders make informed decisions on whether to buy, sell, or hedge positions in affected stocks.