Word
arbitrage
Phoneticsar·bi·trage
US/ˈɑɹbɪˌtɹɑʒ/
UK/ˈɑːbɪtɹɪdʒ/
Definition
n. the practice of buying something in one place at a low price and selling it in another place at a higher price to make a profit. It usually involves different markets or different times.
n. the simultaneous purchase and sale of the same or equivalent financial instruments in different markets to profit from price discrepancies. Often involves low risk due to the immediate nature of the transactions.
Examples
“He makes money through arbitrage by trading on different stock exchanges.”
“Currency arbitrage allows traders to exploit minor differences in exchange rates between different banks to generate a risk-free profit.”
“While pure arbitrage opportunities are rare in highly efficient markets, sophisticated algorithms can still identify and execute trades before the price gaps close, effectively locking in a guaranteed return.”
Examples
simple
“He makes money through arbitrage by trading on different stock exchanges.”
contextual
“Currency arbitrage allows traders to exploit minor differences in exchange rates between different banks to generate a risk-free profit.”
complex
“While pure arbitrage opportunities are rare in highly efficient markets, sophisticated algorithms can still identify and execute trades before the price gaps close, effectively locking in a guaranteed return.”
Etymology
An unadapted borrowing from French arbitrage, from arbitrer (“to arbitrate”); see arbitrate.
Etymology adapted from Wiktionary, available under CC BY-SA 4.0.
Domain
Scan code
englishreference.com/q/arbitrage