// TRADING TERMINOLOGY
What is Arbitrage?
The simultaneous purchase and sale of the same asset in different markets to profit from tiny differences in the asset's listed price.
In-Depth Explanation
Arbitrage is common in high-frequency trading where algorithms exploit price discrepancies between exchanges. For retail traders, it is difficult to execute due to fees and speed requirements.
Practical Example
"Buying Bitcoin on one exchange and selling it instantly on another where the price is $5 higher."
Related Terms
Master the language of risk
Knowing the terms is just the start. Learning how to apply them is where the edge is found.
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