#ArbitrageTradingStrategy

**Arbitrage Trading Strategy (100 Words)**

Arbitrage exploits tiny, fleeting price discrepancies for the *same asset* across different markets or forms to lock in risk-free profit. The core principle is simultaneous buying low in one venue and selling high in another.

**Mechanism:**

1. **Identify Mispricing:** Find an asset (e.g., stock, currency, commodity) priced differently on Exchange A vs. Exchange B, or spot vs. futures.

2. **Execute Simultaneously:** Buy instantly at the lower price and sell at the higher price.

3. **Capture Spread:** Profit equals the price difference minus minimal transaction costs.

**Purpose:** It corrects market inefficiencies. **Reality:** Opportunities vanish instantly due to algorithms and high-frequency trading (HFT), requiring immense speed, tech, and capital. Pure arbitrage is rare; most strategies carry some risk.