How Arbitrage Works
1. *Identifying Price Differences*: Discovering price differences between two or more markets.
2. *Buying at a Low Price*: Purchasing the asset at a low price in one market.
3. *Selling at a High Price*: Selling the asset at a high price in another market.
Types of Arbitrage
1. *Simple Arbitrage*: Buying at a low price and selling at a high price in two different markets.
2. *Complex Arbitrage*: Using advanced algorithms to identify price differences and trade them quickly.
Advantages of Arbitrage
1. *Profit from Price Differences*: Earning profit from price differences between two or more markets.
2. *Risk Reduction*: Reducing risks through rapid trading.
3. *Leveraging Technology*: Utilizing technology to quickly identify and trade price differences.
Challenges of Arbitrage
1. *Speed*: The need for speed in identifying and trading price differences.
2. *Technology*: The necessity for advanced technology to quickly identify and trade price differences.
3. *Competition*: Intense competition in the arbitrage market.
In summary, the arbitrage trading strategy relies on exploiting price differences between two or more markets and requires speed...
