Arbitrage

August 26th, 2017 by Kara in

A trade that profits from exploiting the price differences between a financial instrument on different markets or identical financial instruments priced differently. To properly execute an arbitrage deal the sale and purchase of the asset must happen simultaneously. Due to computerization, these errors in the markets are usually found and fixed very quickly making these trades much harder today. The term arbitrage can also be referred to as a trade that has no risk of negative cash flow.

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