At Harvest Lane, one of our core strategies involves taking a position in stocks that are subject to a takeover (also known as Merger Arb) and/or some other type of corporate activity. If the right opportunities are selected, this strategy produces limited downside volatility of returns, exhibits low correlation with the broader market and can at times be quite lucrative given the asymmetric nature of the opportunities (unlike downside volatility, volatility to the upside is not constrained). However, there is a right way to implement the strategy and there is a wrong way.