#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.