Arbitrage involves the simultaneous purchase of a security in one market and the sale of it or a derivative product in another market to profit from price differentials between the two markets. (See derivative)
Attempting to profit by simultaneously purchasing and selling the same or equal securities in a manner which takes advantage of price differences prevailing in different markets.
A technique of buying and selling a stock at two different prices in two different markets, resulting in profit without risk.
the spread or difference between interest rates; also, the simultaneous purchase and sale of mortgages on mortgage-backed securities in different markets in order to profit from price differentials. definition of definition of arbitrage definition of arbitrage defined
see also Correlation) The act of taking advantage of differences in price between markets. For example, if a stock is quoted on two different equity markets, there is the possibility of arbitrage if the quoted price (adjusted for institutional idiosyncrasies) in one market differs from the quoted price in the other. The term has been extended to refer to speculators who take positions on the correlation between two different types of instrument, assuming stability to the correlation patterns. Many funds have discovered that correlation is not as stable as it is assumed to be.
A technique employed to take advantage of differences in prices across markets. Arbitrage may also involve the purchase of rights to subscribe to a security, or a convertible security, and the sale at or about the same time of the security underlying the rights or convertible security.
Profiting from temporary discrepancies in the price of a currency pair when it is traded on more than one market.
(1) In theory, arbitrage is the simultaneous purchase and sale of two identical commodities or instruments to take advantage of price variations in different markets. For example, the purchase of gold in London and the simultaneous sale of gold in New York.(2) In practice, the term is used to refer to the simultaneous purchase and sale of any two contracts or commodities with largely offsetting risks. For example, the purchase of two-year Treasuries and the sale of futures contracts for an equivalent amount.(3) In municipal finance, the specific practice of investing funds obtained at a tax-preferred low rate of interest in higher-yielding investments until the funds are needed for the purpose intended.
A method of taking advantage of the fact that there may be different prices in different markets for identical goods such as gold, foreign exchange or commodities. Simultaneously, one buys in the lower price market and sells in the higher one.
To take advantage of price discrepancies resulting from temporary imbalances in supply or demand by simultaneous buying and selling..
A combination of transactions designed to profit from an existing discrepancy among prices, exchange rates, and/or interest rates on different markets without risk of these changing. Simplest is simultaneous purchase and sale of the same thing in different markets, but more complex forms include triangular arbitrage and covered interest arbitrage.
Making a gain through trading securities without comitting or risking money.... more on: Arbitrage
Taking advantage of countervailing prices in different markets, e.g. by purchasing an asset for a low price in one market and then selling the asset for a higher price in another market.
Practice of buying and selling the same security in different markets to profit from price differences prevailing in such separate markets.
Purchasing and selling simultaneously the same or equivalent items for the purpose of profiting from differences in market prices. Taking advantage of price differential.
Arbitration. Safety type of trade when the same currency is simultaneously bought and sold against another aiming of the profit generated by the difference between the prices of two contractors.
The simultaneous purchase and sale of identical financial instruments or commodity futures in order to make a profit where the selling price is higher than the buying price.
The simultaneous buying and selling of the same, or equivalent, shares, options or futures in different markets, to exploit the difference in price.
Basically this is the art of buying something cheap in one place and selling it at a profit somewhere else. The rise of global electronic trading has made this process much faster and easier, enabling arbitrageurs - as they're called - to switch huge sums of money across continents in seconds in an attempt to exploit small differences in the quoted prices of investments in different markets - foreign currency, for example. In share trading, so-called risk arbitrageurs attempt to make profits from the usual share price movements of companies that are in takeover situations. These investors will simultaneously buy stock in the target company, whose share price normally rises, while selling that of the bidder, whose share price normally falls. They will also invest in the target company if they think there's a chance the bidder will have to raise the offer price.
Simultaneous purchase of a security and sale of another to generate a risk-free profit.
the simultaneous buying and selling of the same asset (currency, security,…) in different markets to profit from rate differentials.
A transaction that involves the simultaneous purchase and sale of securities, currencies or commodities in two or more markets. Profit is made from the gap between the prices in the different markets. In classical arbitrage, both sides of the transaction are guaranteed, thereby excluding the risk of loss. Risk arbitrage is the simultaneous purchase of a stock in a company being acquired and the sale of the stock of the proposed acquirer. Profit is created by the differential between the expected rise in the target company's shares and the drop in price of the acquirer's shares. Risk is incurred if the proposed acquisition is not completed.
Attempting to profit by exploiting price differences of identical or similar financial instruments, on different markets or in different forms.
The simultaneous trading in one or more similar products in one or more markets with the intention of profiting from any price disparities.
The simultaneous purchase and sale of the same security, currency or commodity on different markets in order to profit from price or currency differentials. The exchange rate differential may be derived from Deposit Rate differentials or Swap points.
Simultaneous purchase and sale or vice versa of the same or similar financial instruments in the markets with the view to making profits from the difference in prices.
Profiting from differing prices in different markets, ie, the purchase of an asset for a low price in one market and its sale for a higher price in another.
Buying on one futures market and selling on another market elsewhere to take advantage of price differences between the two.
Buying a security in one market with a simultaneous sale in another. It can be the same security or a convertible security in one market, in combination with a straight equity security in the other.
the simultaneous purchasing and selling of the identical item in different markets to yield profits with zero risk. It is a technique used to take advantage of differences in price.
A trading technique that involves the simultaneous purchase and sale of identical assets traded on two different exchanges with the intention of profiting by a difference in price between exchanges.
Instruments that have identical characteristics and so are perfect substitutes should trade at the same price. If they do not, a risk-free profit can be generated by simultaneously selling the higher-priced asset and buying the lower priced asset. Arbitrage is the identification and exploitation of such price anomalies.
Also known as a 'riskless profit', this is the simultaneous purchase and sale of a security (or a synthetic replication of the security) in order to profit from a differential in the price.
The simultaneous purchase and sale of equivalent securities and futures in order to benefit from an anticipated change in their price relationship.
process of simultaneously buying in low-priced market and selling the identical item in high-priced market
The practice of exchanging the currency of one country for that of another or a series of countries to gain an advantage from the differences in exchange rates.
The simultaneous buying and selling of two or more different, but closely related securities, in different markets to take advantage of price disparities.
Simultaneously purchasing and selling identical or equivalent financial instruments or commodity futures so as to profit from distortions in their price relationship.
An arbitrage is a system of betting whereby bettors take advantage of differing quotes on the same market amongst bookmakers (usually spread betting firms) to guarantee themselves a profit. If one firm offers a spread quote of 43-45 on a market and a rival firm offers 47-49, an alert bettor could buy at 45 and sell immediately at 47 to guarantee an instant two point profit.
the action of seeking a profit where a set of assets or cash flows has different prices in different markets
The purchase of a stock or other asset (such as currency or commodity) in one market and its sale in another market. The arbitrageur is attempting to make a profit on the "spread" between the two markets. The transaction should result in a risk-free profit.
A sophisticated trading technique whereby one can simultaneously buy and sell the same financial instrument for a price that realizes a profit that is slightly less than the costs of doing the trade.
1. Buying and selling, at temporarily different prices, two securities that are exchangeable for each other, as under a merger plan. 2. Buying a security or commodity in one market and simultaneously selling the same or a related instrument in another market in an attempt to profit from short-term price differentials.
Taking advantage of unjustified differences in the prices of various financial instruments in order to make a risk-free profit.
trading strategies designed to profit from price differences for the same or similar instruments in different markets.
The non-speculative transfer of funds from one market to another to take advantage of differences in interest rates, exchange rates or commodity prices between the two markets. It is non-speculative because an arbitrageur will only switch from one market to another knowing exactly what the rates or prices are in both markets and will only make the switch if the profit to be gained outweighs the costs of the operation.
Trading activity to profit from the correction of price or yield anomalies in markets. This often involves taking a position in one market and offsetting the position in another. As prices or yields move back into line, such positions may be profitably closed out.
The process of driving prices of related assets, or the same assets in different markets, towards consistency by purchasing assets when cheap in one market and selling them when dear in another.
This is a trading strategy that looks to take advantage of price differences of correlated securities, currencies or commodities. Arbitrage may also refer to trading on price differences between a derivative and its underlying security.
The simultaneous purchase and sale of a product in order to realize a riskless profit.
A transaction based on the observation that the same asset sells at two different prices in different markets. It involves the simultaneously buying and selling of the same securities to benefit from the disparity in their prevailing prices in separate markets.
simultaneous purchase and sale of two different but closely related securities to take advantage of a price differential
A condition of mispricing between two markets that offers an opportunity for riskless profits and is expected to disappear rapidly. An example arbitrage: suppose gold is selling in Chicago for $300 an ounce and in New York for $320 an ounce. Suppose also that it only costs $1 an ounce to ship gold from Chicago to New York. One could buy gold in Chicago and sell gold short in New York simultaneously, for a riskless arbitrage profit of $19 an ounce. Arbitrage opportunities like this are rare and last only briefly most of the time. In fact, the absence of arbitrage opportunities is the foundation of modern finance theory; see [Elton Gruber 1984].
(go to top) A means of exploiting price differences for similar instruments between different markets with no net outlay of capital. An early example of arbitrage occurred in the dollar/sterling markets in New York and London. Because prices in the two markets sometimes differed, traders could occasionally buy dollars or pounds in one market, and sell them immediately in the other for a profit. As a result of satellite communications, such geographical arbitrage is now rare. Modern arbitrage occurs frequently in the cash and futures markets, or it can involve options. It is a purely professional occupation, since most opportunities are only available for a few seconds.
The simultaneous purchase of a security on one stock market and the sale of the same security on another stock market at prices which yield a profit.
The process of buying low and selling high.
In its most simple form, arbitrage is defined as the simultaneous purchase and sale of the same security at two different prices in different markets. An arbitrageur buys the security cheap at the same time as selling it dear and thus makes a risk free profit. Arbitrage is a process by which market inefficiencies are eliminated. Efficient markets offer no opportunity for arbitrage.
refers to trading to generate a risk-free profit without investment. For purposes of the province's Matched Book Program, arbitrage refers to borrowing funds at one rate and investing the same funds at a higher rate with minimal risk.
The practice of buying and selling an interlisted stock on different exchanges (i.e. the Montreal Exchange and the Toronto Stock Exchange) in order to profit from minute differences in price between the two markets.
The simultaneous purchase and sale of an instrument in two different markets to profit from a temporary price disparity.
Taking advantage of small price differentials between markets through the purchase or sale of an instrument, and the simultaneous taking of an equal and opposite position in a related market.
The purchase or sale of an instrument while simultaneously taking an equal and opposite position in another related market. Such arbitrage trades attempt to take advantage of small price differences between markets.
Buying a financial instrument in one market in order to sell the same instrument at a higher price in another market.
The simultaneous buying and selling of foreign exchange to realise profits from discrepancies between exchange rates prevailing at the same time in different markets.
When a price differential arises, creating an opportunity to profit through buying and selling. Arbitrage is a "riskless" opportunity to profit, as there is no uncertainty involved. In regards to the foreign exchange market, arbitrage arises when a profit can be made through differentials in exchange rates. Arbitrage opportunities in the foreign exchange market are rare.
The purchase/sale of a contract on a market and the simultaneous taking of an equal and opposite position, usually on another market, to profit from discrepancies in the price and/or currencies involved.
The process where a gap between two market makers’ prices is exploited by buying from one while simultaneously selling to the other to lock in a profit.
Involves a purchase in one market and a sale in a different market to capitalise on what appear to be temporary distortions in price. The term is also used to refer to any trading between markets aimed at profiting from price discrepancies.
The simultaneous purchase of a security on one exchange, while selling the same security on a different exchange to yield a profit.
The simultaneous buying and selling of the securities in different markets at a price advantage.
The simultaneously purchase and sale of identical securities to benefit from a discrepancy in their price.
Simultaneous purchase in one market and sale in another of a security in order to make a profit on relative price differences. For example, a lessee cannot borrow money through a lease and then take those funds and invest them at a higher interest rate than the stated rate on the lease. If this occurs, in many cases the lessee must pay federal income tax on those additional earnings.
Generally, transactions by which securities are bought and sold in different markets at the same time for the sake of the profit arising from a difference in the two markets. With respect to the issuance of municipal bonds, arbitrage usually refers to the difference between the interest paid on the bonds issued and the interest earned by investing the bond proceeds in other securities. Arbitrage profits are permitted on bond proceeds for various temporary periods after issuance of municipal bonds. Internal Revenue Service regulations govern arbitrage of municipal bond proceeds.
The buying and selling of a security or commodity in one market, and selling it in a different market.
This simultaneous purchase of a security on one stock exchange and the sale of the same security on another exchange at prices which yield a profit to the arbitrageur.
An operation which involves a purchase of metal in one market with the simultaneous sale of an equivalent quantity of the same metal in another market, (eg the LME and The New York Commodity Exchange). If two currencies are involved, a foreign exchange transaction is also needed to protect against any change in the parities.
A transaction undertaken to profit from a difference between the prices at which a security, currency or commodity is traded in two or more markets. The net profit will depend on the cost of the transaction including bid-ask spreads, commissions, delivery and other charges. By exploiting artificial price differences, arbitrage tends to eliminate them, making the market more efficient.
The simultaneous buying and selling of the same commodity or foreign exchange in two or more markets in order to take advantage of price differentials.
Trading the same security, currency or commodity in two or more markets in order to profit from differences in prices.
The process of purchasing and selling the identical products, such as foreign exchange, stocks, bonds and other commodities, in several markets intending to make profit from the difference in price.
In the investment world, it refers to an action by an investor or speculator to capitalize on a perceived discrepancy in quoted prices or nominal value. An arbitrageur is the name for the player who enters this transaction, which he/she believes has less risk than other types of trades.
A combination of bets which guarantees a theoretical risk free profit. These sometimes occur when one bookie offers a price which is out of line with the rest of the market. Opportunities don't last long as the bookie will adjust their prices accordingly.
The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another market at higher prices.
Simultaneous sale and purchase of identical or equivalent financial instruments or commodity futures to benefit from a discrepancy in their prices.
Is a form of trading which attempts to profit by discrepancies in price due to location, funding, volatility, communications, response to information, or other differences. Typically, the price differences are small and only the quickest, most cost efficient or funding efficient parties participate. Compare with Risk Arbitrage.
Taking advantage of certain prices in different markets by the purchase or sale of any instrument and at the same time taking an equal and opposite position in a related market to profit from any small price differential.
The process in which one bank rips off another one by selling it something at the wrong price. OK, that was a bit facetious, even if it's pretty accurate. It's the process by which small, local price differences in a share are exploited and thus evened out. For instance, Unilever trades on the stock exchanges in London and in Holland and any changes in price in one market - say, through an institution selling off a large chunk of shares in London - will also rapidly be reflected on the other market through arbitrage.
Taking advantage of countervailing prices in different markets by the purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market to profit from small price differentials.
A trading technique that involves the simultaneous purchase and sale of identical assets or of equivalent assets in two different markets with the intent of profiting by the price discrepancy.
The business of buying or selling securities with the intention of reversing the very same transaction in another exchange in order to profit from the difference in prices for the shares between the two exchanges.
The simultaneous purchase of one commodity against the sale of another in order to profit from fluctuations in the usual price relationship between the two.
Taking advantage of small price differences (of securities or goods) in different markets to make a profit. It involves buying something to sell in another market or at another time.
The purchase of securities on one market for simultaneous or immediate resale on another market with the goal of profiting from a price discrepancy. Currency traders often arbitrage against exchange risk by buying a currency for immediate delivery but also selling that currency on the forward market at the same time.
Taking strategic advantage of differentials in the price of securities such as stocks, bonds and currencies to make opportune profits.
A trading strategy in which one tries to profit from differences in the prices of the same security that is traded on more than one market.
The simultaneous purchase and sale of two different, but related, securities with the intent of profiting by the price discrepancy.
Taking two seemingly conflicting positions on different index markets for the same match or matches - done in the expectation of generating a profit regardless of the result.
Buying on one exchange and selling on another at virtually the same moment to take advantage of a price variation in a company's shares listed on the two exchanges.
simultaneously buying and selling a commodity in different markets to take advantage of price differentials.
The simultaneous purchase and sale of similar commodities in different markets to take advantage of price discrepancy.
The simultaneous purchase and sale on different markets, of the same or equivalent financial instruments to profit from price or currency differentials. The exchange rate differential or Swap points. May be derived from Deposit Rate differentials.
Simultaneous purchase and sale of two different contracts (or a combination of cash and futures) to take advantage of perceived mispricing. In a pure arbitrage, mispricing is locked in and a risk-free profit made through trades.
A position where a profit can be made from a temporary price disparity between two markets (or two products within the same market), by taking the long and short side simultaneously.
The buying of foreign exchange, securities, or commodities in one market and the simultaneous selling in another market, in terms of a third market. By this manipulation a profit is made because of the difference in the rates of exchange or in the prices of securities or commodities involved.
Buying a futures month on one exchange and selling the same month on another Exchange by buying both sides involving the same commodity.
Taking advantage of the difference in the price of a share or currency, usually in two different markets. If a share is quoted at 100p in London and the equivalent of 105p in New York, an arbitrageur would make a profit by selling in New York and buying in London. In the US, arbitrage is often associated with risk arbitrage, which means buying shares in potential takeover targets, waiting for a bid that inevitably pushes up the share price and then selling the shares for a profit.
The simultaneous purchase and sale of identical or equivalent financial instruments or commodity futures in order to benefit from a discrepancy in their price relationship.
making a profit out of buying and selling shares in different markets at the same time
Arbitrageurs make their living by seizing on price differences for a security that is traded on a different market or in a different form, such as an option or a futures contract. Someone who buys, say, a soybean contract on one market and sells a soybean contract on another exchange is practicing arbitrage by locking in a profit.
1) the difference in price of a given commodity either in the same location or in different geographical locations. Grade arbitrage is trading the difference in the price of a commodity in the same location – eg, the difference in the prices of two sweet crudes in northwest Europe. Geographical arbitrage is trading the difference in the price of the same grade in different locations. Often grade and geographical arbitrage are combined – eg, in transatlantic arbitrage, which is trading the price difference between, for example, Brent crude in Europe and West Texas Intermediate in the US. This calculation will include the cost-of-carry as well as the cost of the alternative crude in the US. 2) a term specific to US stock markets, where a speculative position is built up in shares in a particular company that is thought likely to become a takeover candidate.
Simultaneous purchase of cash commodities or futures in one market against the sale of cash commodities or futures in the same or a different market to profit from a discrepancy in prices. Also includes some aspects of hedging. See Spread, Switch.
used to describe a situation where either a temporary or long-term discrepancy in value has emerged--for example, a similar commodity that is priced higher in one locale compared with another. Those who ferret out such discrepancies in value, and realize profits by acting on them, are often called arbitragers. For example, an investor who borrows Japanese Yen at a cost of 1%, then purchases U.S. Treasury notes paying 5%, is arbitraging between Japan's very low cost of capital and the much higher yields available for invested capital in the U.S.
A trading strategy, whereby one may take advantage of the movement of prices, the discrepancies in pricing, or the differences in prices, for guaranteed profits.
A risk-free type of trading where the same instrument is bought and sold simultaneously in two different markets in order to cash in on the difference in these markets.
the process by which assets with comparable risk, liquidity, and tax treatment are priced to yield comparable expected returns
Purchase or sale of marketable securities in order to benefit from the difference in the security's prices on two different markets.
Business of buying in one exchange and selling in another to take advantage of price differences.
Trading the differential between two markets simultaneously
This is the practice of simultaneously buying and selling the same (or equivalent securities) to profit from the disparity in their prevailing prices in separate markets. This activity applies to equivalent securities trading in different markets, securities with convertible features, or securities involved in mergers, tender offers, recapitalizations, or corporate divestitures.
Using the different quotes offered by spread firms at the start of an event to buy with one firm and sell with another, so that they can guarantee themselves a profit no matter what the final result. See our Tips page for an example.
The purchase of a commodity against the simultaneous sale of a commodity to profit from unequal prices. The two transactions may take place on different exchanges, between two different commodities, in different delivery months, or between the cash and futures markets. See Spreading.
The practice of exploiting price differentials between different markets, products or locations
A classic trading strategy to profit from different prices for the same security, commodity or financial instrument in different markets. Market forces will normally ensure that these arbitrage differences are short lived. The simultaneous purchase of one commodity against the sale of another in order to profit from distortions from usual price relationships.
The process of buying and selling similar securities, commodities or currencies in order to profit from temporary price differentials between two markets.
Attempting to profit from price differences of the same security, currency or commodity when it is traded on different markets or in different forms.
1) A transaction that generates a risk-free profit; 2) a leveraged speculative transaction; and 3) the activity of engaging in either of the above two forms of arbitrage transactions.
In FX market, the purchase or sale of a currency and simultaneous taking of an opposite position in a related market, by doing this, a small price differentials between markets can be taken. However, this small price differential must cover the handling charge.
The simultaneous buying and selling of any securities, including mortgages, mortgage backed securities, or future contracts in different market places, for the purpose of realizing profit from different prices.
The simultaneous purchase and sale of financial instruments to take advantage of inefficiencies between international capital markets and thereby lower the Province’s cost of funds.
The act of gaining a risk free profit by simultaneously entering into a number of transactions in two or more markets. The standard textbook comment on arbitrage is that these risk free opportunities do not normally exist in an efficient market; as arbitrageurs take advantage of the opportunity the market adjusts and the opportunity disappears. In practice, these opportunities are only available to investors who can move quickly or transact large amounts of business so that transaction costs are not significant.
Where someone is able to purchase an asset on one market and then simultaneously sell the asset at a higher price usually in a different market. Ideally, this produces a risk free profit for the arbitrageur.
The simultaneous purchase and sale of two different, but closely related, securities to take advantage of a disparity in their prices.
The process of purchasing a product in a lower-priced market and re-selling it to someone else in a higher priced market with essentially no risk; basically, the philosophy of "buy low-sell high." For example, say the same product is sold in one market at a price of $30 and in another market at a price of $31. In this case, an arbitrageur could purchase the product in the first market and immediately turn around an sell it in the second market, thereby earning $1 risk-free. Arbitrage opportunities arise from minor pricing discrepencies among markets.
A strategy used by investors who identify slight price differences between certain markets and use this miss-alignment to “buy low, sell high”.
Taking advantage of different rates, prices or conditions between different markets or maturities. This typically involves buying an asset in one market at a lower price and simultaneously selling it in another market for a higher price.
The act of simultaneous buying and selling in two different markets, with the aim of taking advantage of the temporary differential that exists between the two prices.
Simultaneous buying and selling of securities at different prices in different markets resulting in riskless profits.
Dealing in two or more markets (e.g. currencies, commodities) at the same time to benefit from rate differentials in situations where prices and returns are fixed.
Buying in one market and selling in another to take advantage of technical price differences.
Betting the same event at separate sports books in order to lock in a profit by taking advantage of different betting lines.
Arbitrage occurs when you can buy and sell in the same market and guaratee a profit risk free. This occurs when two separate firms have an opposing view on a market.
The purchase of securities on one market for immediate resale on another market in order to profit from a price discrepancy.
profiting from the differences in price when the same security, currency or commodity is traded on two or more markets.
This is the process of buying securities at a low price in one market and simultaneously selling them in another market at a higher price to make a profit. In share trading, Investors called risk arbitrageurs attempt to make profits from an expected rise in the price of a takeover target's shares and a drop in the price of the bidding company's shares. These traders simultaneously buy stock in the target company while selling those of the bidding company. They will also invest in the target company if they think, the bidder will be forced to raise his offer price.
Taking advantage of different prices in different markets. For example; the purchase of an asset for a low price in one market and its sale for a higher price in another.
Made easier through odds comparision services, arbitrage is a variation in bets across different bookmakers which allows the punter to back both sides and STILL make a profit
Dealing in two or more markets at the same time (or in similar products in the same market) to take advantage of temporary mispricing in order to make a profit
Arbitrage refers to the exploitation of differences between the prices of financial assets or currency or a commodity within or between markets by buying where prices are low and selling where they are higher. For example, if coffee is cheaper in New York than in London after allowing for transport and dealing costs, it will pay to buy in New York and sell in London. If interest rates are higher on a Euro deposit in London than in Frankfurt, a higher return will be obtained by switching funds from one centre to the other. Unlike speculation, arbitrage does not normally involve significant risks, since the buying and selling operations are carried out more or less simultaneously and the profit made does not depend upon taking a view on future price changes. By eliminating price differentials, arbitrage contributes to the achievement of market equilibrium.
Profiting by simultaneously buying a security in one market and selling it in another because the prices are different in both markets. By taking advantage of momentary disparities in price, the arbitrageur performs the economic function of making the markets more efficient.
Taking advantage of minor aberrations in the market to try to profit as the market returns to normal.
The concept of making a profit without risk and without any net outlay of capital. The arbitrageur will simultaneously buy and sell the same asset or two bundles of assets that amount to the same and profit from the difference in price.
The simultaneous purchase of one commodity, future or option, against the sale of another in order to profit from distortions from usual price relationships. Variations include simultaneous purchase and sale of different delivery months of same commodity, future or option; of the same commodity, future or option and delivery month on two different exchanges; and the purchase of one commodity, future or option against the sale of another commodity, future or option. See also "Spread."
The simultaneous buying and selling of any securities, including mortgages, mortgage-backed securities or future contracts in different markets, for the purpose of realizing a profit from differences in price.
The act of buying and selling the same asset in different markets to take advantage of price variations.
Technically, the purchase of a security in one market and the simultaneous sale of it or its equivalent in the same market or other markets for the differential or spread prevailing, at least temporarily, because of conditions peculiar to each market. Commonly refers to a swap done between two similar issues based upon an anticipated change in price spreads.
The trading of one security or currency for another with the hopes of taking advantage of small differences in conversion rates among several currencies in order to achieve a profit. For example, if $1.00 in U.S. currency buys 0.7 British pounds currency, £1 in British currency buys 9.5 French francs, and 1 French franc buys 0.16 in U.S. dollars, then an arbitrage trader can start with $1.00 and earn dollars thus earning a profit of 6.4 percent.
The simultaneous buying and selling of securities to take advantage of price discrepancies. Arbitrage opportunities usually surface after a takeover offer.
(Coffee Market) Trading between markets in order to take advantage of price differentials.
The simultaneous purchase and sale of an instrument in two separate markets, when the price is out of line.
The simultaneous buying and selling of a security at two different prices in two different markets.
Buying securities in one country, currency or market and selling in another to take advantage of price differentials.
strictly, the act of simultaneously buying and selling a commodity in order to take advantage of variations in normal price relationships between different time periods, commodity grades, locations or different commodities. Less formally, also used to describe the relationship between values without necessarily implying a buy/sell. Example "The distillate arb between Europe and the US is open", meaning it is either actually or theoretically economically viable to ship distillates between the two locations.
A technique employed to take advantage of differences in price. If, for example, ABC stock can be bought in New York for $10 a share and sold in London at $10.50, an arbitrageur may simultaneously purchase ABC stock here and sell the same amount in London, making a profit of 50 cents a share, less expenses. Arbitrage may also involve the purchase of rights to subscribe to a security, or the purchase of a convertible security - and the sale at or about the same time of the security obtainable through exercise of the rights or of the security obtainable through conversion. (See: Convertible, Rights)
Buying securities in one market and then selling them immediately in another market to make a profit on the price discrepancy
Profiting from differences in the price of a single security that is traded on more than one market.
A financial transaction where an arbitrageur (arb) simultaneously purchases in one market and sells in another where there is a slight price differential. Often it is a full hedge, and therefore, a risk-free transaction. Arbs play an important role in keeping markets liquid and efficient.
Profiting from the difference in price of the same security traded in more than one stock market.
It is trading in attempt to take advantage of the price difference between one exchange and another. For example, one can buy one Infosys share on one exchange and sell another Infosys share that is traded on a second exchange. By placing this trade the speculator intends to profit from the difference in the prices.
The simultaneous purchase on one exchange and sale on another of the same or equivalent financial instruments in order to benefit from price or currency differentials.
The simultaneous purchase and sale of the same or equal securities in such a way as to take advantage of price differences; buying something where it is less expensive and selling it where it is more expensive.
To profit through the buying and selling of the same asset without risk, with no net outlay of capital. In reality, it requires the simultaneous buying and selling of the same asset and "earning" the difference.
the process of simultaneously buying and selling the same instrument at different prices, thereby producing a risk-free profit
Simultaneous buying and selling of a security at two different markets, with two different prices resulting in a profit.
The act of simulatneously purchasing goods in one market and selling them in another market at a higher price
A transaction which generates a risk-free profit.
The purchase of an instrument and concurrent taking of an equal and turn around position in a related market.
The simultaneous purchase and sale of the same or equal securities in such a way as to take advantage of price differences prevailing in separate markets. (See Bona Fide Arbitrage; Risk Arbitrage)
The simultaneous purchase of one commodity against the sale of another in order to profit from fluctuations in the usual price relationships. Variations include the simultaneous purchase and sale of different delivery months of the same commodity; of the same delivery month, but different grades of the same commodity; and of different commodities.
An attempt to profit from momentary price differences that can develop when a security or commodity is traded on two different exchanges.
The purchase of financial instruments (e.g. foreign exchange or securities) or commodities on one market with the intention of selling them simultaneously on another market to take advantage of the price differential between the two markets. The arbitrageur (the person carrying on the business of arbitrage) may earn a profit by exploiting the differences in the rates of exchange or the prices of securities or commodities involved. Arbitrage is attractive only if the price difference is large enough to cover the costs incurred (such as the costs of transporting the goods from one market to the other). Français: Arbitrage Español: Arbitraje
Simultaneous purchase of cash commodities or futures in one market against the sale of cash commodities or futures in a different market, to profit from a discrepancy in prices. In some definitions, arbitrage refers only to riskless transactions in which the entire investment is made with borrowed funds.
A strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more markets in order to benefit from a discrepancy in their price relationship. In a theoretical efficient market, there is a lack of opportunity for profitable arbitrage. See Spread.
The process in which professional traders simultaneously buy and sell the same or equivalent securities for a riskless profit. See also Risk Arbitrage.
The simultaneous purchase of a security on one stock exchange and sale of the same security or an equivalent of that security on the same or another exchange which can result in a profit. The profit is the difference between the buy and sell prices and is usually a very small amount per unit. Arbitrage is a sophisticated manoeuvre executed by professional traders.
Riskless trading. Originally, purchasing something in one market for simultaneous sale in another. More broadly, the purchase of a security and sale of a related or very similar security, intended to capture the mis-pricing of the one relative to the other. For example, purchase of a call option and short sale of the equity into which the option exercises.
A strategy used by market traders to exploit the price difference between similar assets.
The purchase (or sale) of an instrument and the simultaneous taking of an equal and opposite position in a related instrument to exploit mispricing. Also defined as the making of riskless, guaranteed profits by exploiting market inefficiencies. An activity undertaken by arbitrageurs.
The simultaneous purchase or sale of a contract in different markets to profit from discrepancies in prices between those markets.
Simultaneous buying and selling of the same asset in different markets in order to capitalize on variations in price between those markets .
Arbitrage is the market-neutral buying and selling of a security to take advantage of price discrepancies in different markets. However, the definition has broadened from the same security to securities that have similarities ¾ for example, an arbitrageur might construct a hedge by buying a company's convertible bond and shorting the same firm's common stock.
See on: Wikipedia Investopedia The simultaneous purchase and selling of an asset in order to profit from a differential in the price. The exchange rate differential or Swap points. May be derived from Deposit Rate differentials.
The practice of buying large blocks of stock in companies that are believed to be the target of corporate buyouts or takeovers.
Profiting from differing prices in different markets, ie, buying an asset for a low price in one market and selling it for a higher price in another.
Simultaneous purchase and sale of similar instruments in different markets to take advantage of price discrepancies.
Risk-free buying of an asset in one market and simultaneous selling of an identical asset at a profit in another market.
The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets.
Arbitrage is a securities trading strategy that involves simultaneously buying and selling the same securities or equivalent securities to profit from the difference in their prices in separate markets. Arbitrage-based profit-making opportunities only exist when markets in securities are inefficiently priced.
A technique employed to profit from buying or selling the same security in different market places, thus making money from the disparity in market prices.
In economics, arbitrage is the practice of taking advantage of a price differential between two or more markets: a combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, a risk-free profit. A person who engages in arbitrage is called an arbitrageur.
The difference in price of a given commodity either in the same location or in different geographical locations. Grade arbitrage is trading the difference in the price of a commodity in the same location – e.g. the difference in the prices of two sweet crudes in northwest Europe. Geographical arbitrage is trading the difference in the price of the same grade on difference locations. Often grade and geographical arbitrage are combined – e.g. in transatlantic arbitrage which is trading the price difference between, for example, Brent crude in Europe and West Texas Intermediate in the US this calculation will include the cost-of-carry as well as the cost of the alternative crude in the US.
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