Arbitrage
Trading Strategy
Definition
The practice of simultaneously buying and selling identical or equivalent securities in different markets to profit from price differences, helping ensure market efficiency by eliminating pricing discrepancies.
Key Points
- Risk-free profit from price differences
- Helps maintain market efficiency
- Requires quick execution capabilities
Examples
Stock trades $100 NYSE, $100.10 NASDAQCurrency arbitrage across different exchangesQuick Info
Category
Trading Strategy
Related Topics
price discovery
market efficiency
risk free profit
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