arbitrage.

Buying and selling an equivalent asset or item across markets to profit from a price difference, typically through closely coordinated transactions.

Use it for

Words that belong together

• arbitrage opportunity
• limits to arbitrage
• currency arbitrage

On the page

Transaction fees eliminated the apparent arbitrage opportunity between the two exchanges.

Arbitrage helped bring the prices of the equivalent securities closer together.

The investor's purchase was speculation, not arbitrage, because no offsetting sale fixed the return.

Usage notes

Primary category: academic. Finance term, usually uncountable. Strict arbitrage differs from speculative buying in the hope of a later price rise; fees and execution risks can remove the apparent opportunity. Usually uncountable in the recorded noun sense; no ordinary noun plural. Derived person noun (not an inflection): arbitrageur. Secondary verb inflections [base, third-person singular, past, past participle, -ing]: arbitrage, arbitrages, arbitraged, arbitraged, arbitraging.