Currency arbitrage

Currency arbitrage

Taking advantage of divergences in exchange rates in different money markets by buying a currency in one market and selling it in another market.

Currency Arbitrage

An investment strategy in which one buys a currency on one market and instantly sells it on another market. Currency arbitrage takes advantage of temporary discrepancies in price between the two markets. Because currency markets are so liquid, opportunities for currency arbitrage are few and generally last only for a few seconds. Conducting it requires sophisticated computer software.