Arbitrage Definition

Arbitrage is the practice of profiting from price differences across markets.

What is Arbitrage?

Arbitrage involves buying an asset at a lower price and selling it at a higher price elsewhere.

These opportunities tend to disappear quickly as markets adjust and prices realign.

Understanding arbitrage explains how price gaps are corrected.

Buying a stock on one exchange at $100 and selling it on another at $101 is arbitrage.

The account balance is the total amount of funds available in a trading account, including cash, profits, and losses, at a specific point in time.

An account statement is a detailed report that summarizes all trading activity, balances, and transactions over a specific period.

Accrued interest is the interest that has accumulated on a financial instrument but has not yet been paid.