What is arbitrage trading

Arbitrage trading is several related transactions that aim to profit from the price difference for the same or related assets at the same time in different markets or in the same market at different times.

Arbitrage trading in brief

Arbitrage trading is considered risk-free because it exploits price imbalances. This strategy is based on low buying and high selling, but in the event of arbitrage, the investor knows the purchase and selling price in advance and any risk is covered immediately.

This is the simultaneous opening of opposite positions in various markets. A trader can buy an asset at a lower price in one market and sell it at a higher price in another. These two positions cancel each other out and the trader makes a profit based on the price difference.

Arbitrage trading must be fast, because the difference in the price of assets in different markets can disappear in a very short time. There have been many more opportunities for arbitrage in the past, but only technological developments have limited the rise in price differences.

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