#ArbitrageTradingStrategy

The arbitrage strategy in trading is the exploitation of price differences for the same financial asset (such as stocks, currencies, commodities) between two or more markets, or between different assets with related values, with the aim of achieving a nearly guaranteed profit.

The idea in brief:

* Identifying the difference: The trader notices a price difference for the same asset between two different exchanges or platforms.

* Simultaneous buying and selling: The trader buys the asset at a lower price in the first market and sells it at the same moment (or with a very slight time difference) at a higher price in the second market.

* Achieving profit: The difference between the buying and selling prices is the profit made by the trader.

Why does it happen?

Arbitrage opportunities occur due to temporary market inefficiencies, where prices do not immediately equalize across all exchanges.

Common types:

* Spatial arbitrage: Buying and selling the same asset in two different geographic exchanges.

* Triangular arbitrage: Taking advantage of price differences among three different currency pairs in the forex market.

Advantages:

* Low risk: It is considered one of the relatively low-risk trading strategies, as profit relies on existing price differences.

* Contributing to market efficiency: It helps to equalize prices and reduce discrepancies between markets.