Arbitrage
What is it? Taking advantage of price differences between two or more markets. True arbitrage is risk free and can often be done by using 100% leverage. Since there are arbitrageurs taking advantage of inefficiencies of markets, they drive the market towards efficiency.There are many opportunities for arbitrage in both financial markets and in commodities trading. While many of the obvious examples of arbitrage are already being monitored and resolved by institutions, there may still be more opportunities. An example of how an arbitrage opportunity would arise is if a mutual fund was trading below the value of the securities it contained.
Added By: Tyler
The Arbitrage definition has been viewed 100 Time(s)!
Send To Friends!
If you'd like to send the Arbitrage definition to yourself or to your friends/colleagues, just enter the e-mail addresses in the boxes below -We hope you now understand the meaning of Arbitrage. If you need any more information on this term, please don't hesitate to contact us.