Glossary

Arbitrage is a trading strategy where investors take advantage of price differences for the same asset across different markets or exchanges. 📈

They buy the asset where it's cheaper and sell it where it's more expensive, making a profit from the price difference.

For example, if a stock is trading at $100 on Exchange A and $101 on Exchange B, an arbitrageur would buy the stock on Exchange A and simultaneously sell it on Exchange B, pocketing the $1 difference as profit.

Fun fact: Arbitrage opportunities can be short-lived as the market tends to correct price discrepancies quickly. To take advantage of these fleeting opportunities, some traders use sophisticated algorithms and high-speed computers 🖥️ to identify and execute arbitrage trades in milliseconds!