Glossary Term


Back to Glossary

Arbitrage is simply the practice of benefiting from the price discrepancy between two markets. Merchants have done this since the beginning of time, buying products from places where they’re cheap and selling them on in other areas where they’re expensive. In trading it works much the same way, if the exchange value of an asset is cheaper in one market than another, traders will buy in the more affordable market and sell in the more expensive one. Arbitrage is a natural function which helps to fix market inefficiencies. This is because when enough traders take advantage of the arbitrage opportunity, the result is to bring the prices of the two markets back in line with each other.

Found the definition you’re looking for?
If you feel we’ve missed a term; let the Traders Expert team know and we’ll include it in our Glossary.

What is arbitrage?

Join Our Community!

Receive invitations to our live events, webinars & more!

Traders Expert