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

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

Treasuries market would reduce liquidity risks associated with a popular hedge fund arbitrage trading strategy that could strain the broader financial markets if it unravels abruptly, said Moody's.

From Reuters

"Today's rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight," he said.

From Reuters

“Today’s rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight.”

From New York Times

Treasuries futures this year as part of the so-called 'basis trade', a leveraged arbitrage play profiting from price differences between cash bonds and futures.

From Reuters