What Is Arbitrage And How Does It Work?

The simultaneous buying and selling of the same stocks, bonds, etc, in different markets to profit from unequal price

How it works

Arbitrage is a system of buying in a market where the price of the article happens to be cheap, and selling at once in a market where the price is higher.

Arbitrage is conducted especially in foreign exchange markets, and in Stock Exchange markets. It is also applied to commodities such as wheat and coffee, dealt in by exchanges in several centers.

Also the buying and selling of stocks or bills of exhange to take advantage of varying prices in different markets.