arbitrage

[ ahr-bi-trahzh ahr-bi-trij ]

noun

1. Finance. the simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices.
2. Archaic. arbitration.

verb (used without object)

, ar·bi·traged, ar·bi·trag·ing.

1. Finance. to engage in arbitrage.

arbitrage

/ ˈɑːbɪˌtrɑːʒ; ˈɑːbɪtrɪdʒ; ˌɑːbɪtræˈʒɜː /

noun

1. finance
   1. the purchase of currencies, securities, or commodities in one market for immediate resale in others in order to profit from unequal prices
   2. ( as modifier )

      arbitrage operations

Derived Forms

• arbitrageur, noun

Word History and Origins

Origin of arbitrage¹

1470–80; < Middle French, equivalent to arbitr ( er ) to arbitrate, regulate (< Latin arbitrārī; arbitrate ) + -age -age

Word History and Origins

Origin of arbitrage¹

C15: from French, from arbitrer to arbitrate

Example Sentences

“We want people that are informed, because informed people make for better forecasts. If you’re smart and you can understand things like arbitrage opportunities, you can make money when people make pricing mistakes. That’s a lot more sophisticated than saying, ‘Gimme $20 on Kamala Harris.’

From Slate

Mr. Boesky brought an aggressive style to the once-sleepy world of arbitrage, the buying and selling of stocks in companies that appear to be takeover targets.

From New York Times

“Running a public company as a private fiefdom for the benefit of a controlling shareholder adversely affects minority investors and is a disincentive for outside investment,” Simon Waxley, head of equity arbitrage at Whitebox, said in a statement to The New York Times.

From New York Times

His other major credits include “An American Crime,” “Arbitrage,” “All Is Lost,” “That Awkward Moment,” “The Birth of a Nation,” “Malcolm & Marie” and “Irma Vep.”

From Los Angeles Times

There are many reasons cited for that - one of which is that asset managers tend to build bond positions via futures before sourcing cash bonds later on and hedge funds on the other side of that trade use short futures trades to arbitrage anomalies between cash and futures prices.

From Reuters