ARB is a trading term that means the value of a stock is actually higher than the current trading price. An example would be if a moviestock had a price of $30 when it had already done $35mill in box office. The moviestock is really worth $35 but is currently trading (lower) at $30. ARB is an easy way to make money at HSX. If you were to buy that stock at $30 (when it has already done $35mill in box office), then right at the point of purchase you would have already made a profit of $5 from that stock ($5 * 50,000 shares = $250,000).

ARB usually happens in two ways at HSX:

1) When a stock is IPOed (Holiday Warrants, Blockbuster Warrants, TV Stocks, etc) players do a one time investment and hold the stock long term. This causes the stock to rise and then level off. Since most HSX players invest in the stock during the IPO period, once the stock levels off it does not move much in price until delist causing it to become ARB.

Example: TV Stock XYZ IPOs for $5 (meaning 5 episodes). A majority of HSX players buy this stock and hold it long. Once the IPO period is over the price rises to $8 because of players holding long. New players are constantly coming into the game and they catch on to this TV stock and also go long causing the price of XYZ to go to $8.75. The premiere of this TV show is a hit and the network decides to order 21 episodes for the season. This causes some more players to invest in the stock causing the price to rise to $9.25. At this point, a majority of players have this stock long, and since there are not many players actively buying this stock the price does not move after this point. Eventually the TV show airs 10 episodes and that makes the stock ARB (at $9.25 price). As the show airs its #10-#21 episodes the price of the stock does not move much because players are not actively buying it (most already own long). For TV Stocks, it is not uncommon to be at the end of the season with 21 episodes aired and a price of $16 (ARB by 5pts).

2) When movies are runaway hits, it is very easy for them to go ARB.

Example: Many players went long on Avatar going into its opening weekend and it did good. After the weekend adjust, the players who had it shorted, flipped and went long. The price rose for a few weeks due to player trading, but eventually Avatar was making so much box office on a daily basis that player trading couldn't keep up with the increasing box office amount.

So that was a nice little lesson and you learned something about ARB. Now let's make some money from stocks that are ARB!

As was said above, it is easy for TV Stocks to go ARB later in the season because most players invest long in the IPO period causing the stock price to level off. HSX delists the TV Stocks on May 31 or whenever the show has been canceled or are done for the season (whichever of the three comes first). We had two shows delist just last week. Several other shows are just a few weeks away from delisting (or being canceled) so I thought we should run through the TV Stocks in this edition of the Free Money Report:

Price: $10.81

Episodes Aired: 18

Episodes Ordered: 24

This show is currently worth $18 but is only priced at $10.81. Buying now guarantees a $71,900 profit (ARB) with a $131,900 total possible profit once all 24 episodes have aired.

Possible Profit: $131,900

Price: $9.38

Episodes Aired: 15

Episodes Ordered: 15

This show is worth $15 but is only priced at $9.38. Buying now guarantees a $56,200 profit (ARB).

Possible Profit $56,200

Price: $10.68

Episodes Aired: 17

Episodes Ordered: 22

This show is currently worth $17 but is only priced at $10.68. Buying now guarentees a $65,800 profit (ARB) with a $115,800 total possible profit once all 22 episodes have aired.

Possible Profit: $115,800

Price: $10.94

Episodes Aired: 15

Episodes Ordered: 18

This show is currently worth $15 but is only priced at $10.94. Buying now guarentees a $40,600 profit (ARB) with a $70,600 total possible profit once all 18 episodes have aired.

Possible Profit: $70,600

Price: $13.02

Episodes Aired: 17

Episodes Ordered: 23

This show is currently worth $17 but is only priced at $13.02. Buying now guarantees a $39,800 profit (ARB) with a $99,800 total possible profit once all 23 episodes have aired.

Possible Profit: $99,800

Price: $9.90

Episodes Aired: 12

Episodes Ordered: 20

This show is currently worth $12 but is only priced at $9.90. Buying now guarantees a $21,000 profit (ARB) with a $101,000 total possible profit once all 20 episodes have aired.

Possible Profit: $101,000

Price: $16.66

Episodes Aired: 19

Episodes Ordered: 25

This show is currently worth $19 but is only priced at $16.66. Buying now guarentees a $13,400 profit (ARB) with a $83,400 total possible profit once all 25 episodes have aired.

Possible Profit: $83,400

Price: $11.20

Episodes Aired: 14

Episodes Ordered: 18

This show is currently worth $14 but is only priced at $11.20. Buying now guarantees a $28,000 profit (ARB) with a $68,000 total possible profit once all 18 episodes have aired.

Possible Profit: $68,000

Price: $5.91

Episodes Aired: 9

Episodes Ordered: 13

This show is currently worth $9 but is only priced at $5.91. Buying now guarantees a $30,900 profit (ARB) with a $70,900 total possible profit once all 13 episodes have aired.

Possible Profit: $70,900

Price: $16.79

Episodes Aired: 18

Episodes Ordered: 24

This show is currently worth $18 but is only priced at $16.79. Buying now guarantees a $12,100 profit (ARB) with a $72,100 total possible profit once all 24 episodes have aired.

Possible Profit: $72,100

Price: $12.76

Episodes Aired: 14

Episodes Ordered: 22

This show is currently worth $14 but is only priced at $12.76. Buying now guarantees a $12,400 profit (ARB) with a $92,400 total possible profit once all 24 episodes have aired.

Possible Profit: $92,400

Hopefully this sent some money your way, helped you understand how TV Stocks work, and taught you about ARB. Tune in here next Saturday for the next edition of the Free Money Report.

$962,100