In finance, arbitrage is the activity of buying shares or currency in one financial market and selling it at a profit in another.
[business]
arbitrage in British English
(ˈɑːbɪˌtrɑːʒ, ˈɑːbɪtrɪdʒ)
noun
finance
a.
the purchase of currencies, securities, or commodities in one market for immediate resale in others in order to profit from unequal prices
b.
(as modifier)
arbitrage operations
Derived forms
arbitrageur
noun
Word origin
C15: from French, from arbitrer to arbitrate
arbitrage in American English
(ˈɑrbəˌtrɑʒ)
noun
1.
a simultaneous purchase and sale in two separate financial markets in order to profit from a price difference existing between them
2.
a buying of a large number of shares in a corporation in anticipation of, and with the expectation of making a profit from, a merger or takeover
: in full risk arbitrage
verb intransitiveWord forms: ˈarbiˌtraged or ˈarbiˌtraging
3.
to engage in arbitrage
Word origin
LME < Fr < arbitrer, to judge < L arbitrari: see arbitrate; for 2, < Fr arbitrage
arbitrage in Finance
(ɑrbɪtrɑʒ)
noun
(Finance: Investment)
Arbitrage is the simultaneous purchase and sale of an asset in order to take advantage of a difference in price.
A dealer who can ease a billion dollars of highly volatile long-term bonds into hisown portfolio and hedge it discreetly through arbitrage often captures the business of coveted accounts.
Arbitrage takes advantage of discrepancies in price or yields in different markets.
Arbitrage is the simultaneous purchase and sale of an asset in order to take advantage of adifference in price.
Examples of 'arbitrage' in a sentence
arbitrage
Too often they reflect the objectives of tax avoidance and regulatory arbitrage.
Times, Sunday Times (2011)
This is known as covered interest arbitrage.
Maurice D. Levi International Finance: The markets and financial management of multinational business. (1983)
The effect of interest arbitrage is to make it irrelevant where a person invests or borrows.
Maurice D. Levi International Finance: The markets and financial management of multinational business. (1983)
We show a band around the interest parity line within which round-trip interest arbitrage is unprofitable.
Maurice D. Levi International Finance: The markets and financial management of multinational business. (1983)
If this were not so, there would be interest arbitrage.
Maurice D. Levi International Finance: The markets and financial management of multinational business. (1983)
The fund is concerned that if some countries pull far ahead of others, companies will exercise regulatory arbitrage.
Times, Sunday Times (2010)
Interest arbitrage also involves two foreign exchange transaction costs, since the borrowed currency is sold spot and then bought forward.
Maurice D. Levi International Finance: The markets and financial management of multinational business. (1983)
Hedge funds love deal arbitrage.
Times, Sunday Times (2016)
Therefore, not unexpectedly, transaction costs discourage this covered interest arbitrage.
Maurice D. Levi International Finance: The markets and financial management of multinational business. (1983)
One thing is certain: international differences in the scope and nature of regulation will remain, presenting opportunities for regulatory arbitrage.