arbitrage Definition
the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.
Using arbitrage: Examples
Take a moment to familiarize yourself with how "arbitrage" can be used in various situations through the following examples!
Example
The company engages in arbitrage by buying low and selling high in different markets.
Example
Arbitrage opportunities exist when there are price differences between two or more markets.
Example
He made a profit through arbitrage by buying stocks in one market and selling them in another.
arbitrage Synonyms and Antonyms
Synonyms for arbitrage
Phrases with arbitrage
a type of arbitrage that involves buying and selling securities in anticipation of corporate events such as mergers, acquisitions, or reorganizations
Example
Risk arbitrage is a popular strategy among hedge funds and other institutional investors.
a type of arbitrage that involves using quantitative models to identify and exploit pricing inefficiencies in financial markets
Example
Statistical arbitrage has become increasingly popular with the rise of algorithmic trading and big data analytics.
a type of risk arbitrage that involves buying and selling securities of companies involved in a merger or acquisition
Example
Merger arbitrage can be a profitable strategy if the deal goes through as expected, but it also carries significant risks if the deal falls apart.
Origins of arbitrage
from French 'arbitrage', from 'arbitrer' meaning 'to judge'
Summary: arbitrage in Brief
'Arbitrage' [ˈɑːbɪtrɑːʒ] refers to the practice of buying and selling securities, currency, or commodities in different markets or in derivative forms to take advantage of price differences. It is a form of speculation and trading that can be used to generate profits. Examples of arbitrage include buying low and selling high in different markets and exploiting pricing inefficiencies using quantitative models. Different types of arbitrage include risk arbitrage, statistical arbitrage, and merger arbitrage.
