#ArbitrageTradingStrategy

How Arbitrage Works:

Arbitrage opportunities arise due to

temporary market inefficiencies, such

as:

Supply and demand imbalances:

Different levels of buying and selling

pressure in various markets can

lead to price disparities

Currency exchange rate

variations: For assets traded across

borders, fluctuations in exchange

rates can create arbitrage

opportunities.

Transaction costs or regulatory

restrictions: These factors can

LG

markets.

Information asymmetry: Although

less common with modern

technology, a slight delay in

information dissemination could

theoretically lead to opportunities

Arbitrageurs, or traders who employ

this strategy, act very quickly tc

capitalize on these fleeting

opportunities. Due to the rapid nature

of price convergence in today's highly

efficient markets, most successful

arbitrage is now executed using

sophisticated algorithms and

high-frequency trading systems.