#ArbitrageTradingStrategy

Arbitrage is the strategy of taking advantage of price differences in different markets for the same asset. For it to take place, there must be a situation of at least two equivalent assets with differing prices. In essence, arbitrage is a situation where a trader can profit from the imbalance of asset prices in different markets. The simplest form of arbitrage is purchasing an asset in a market where the price is lower and simultaneously selling the asset in a market where the asset’s price is higher.

Arbitrage Diagram

Arbitrage is a widely used trading strategy, and probably one of the oldest trading strategies to exist. Traders who engage in the strategy are called arbitrageurs.