Arbitrage trading is a strategy that capitalizes on price discrepancies for the same asset across different markets or exchanges. Traders purchase the asset at a lower price in one market and simultaneously sell it at a higher price in another, aiming to secure a profit from the difference. This approach is prevalent in markets such as cryptocurrencies, forex, and equities.
To effectively implement arbitrage strategies, traders require rapid execution capabilities, often achieved through automation and access to multiple trading platforms. However, these opportunities are typically short-lived due to high competition and the swift correction of price differences by the market. Consequently, only those equipped with advanced technology and swift execution can consistently benefit from arbitrage opportunities.