arbitrage
Cross-market profit strategy
Arbitrage is the practice of exploiting price differences for the same asset across different markets, buying where it's cheap and selling where it's more expensive to pocket the difference.
In finance, this might mean purchasing a stock on one exchange and simultaneously selling it on another where the price is slightly higher.
The term has extended beyond trading to describe any strategy of taking advantage of inefficiencies or discrepancies: retail arbitrage involves buying clearance items to resell online at a markup.
Currency trading market
- securitiesTradeable financial assets
- commoditiesTradeable raw materials
- futuresContracts for future delivery
- optionsAvailable courses of action
bonds · equities · derivatives · swaps · cryptocurrency · ETF · ADR · spot
Incorrect cost assignment
- inefficiencySuboptimal use of resources
- differentialRelative difference between things
- spreadTo distribute widely
- discrepancyDifference between expected and actual
imbalance · divergence · gap · disparity · asymmetry · dislocation · anomaly · deviation
Happening at same time
- algorithmicFollowing programmed steps
- high-frequencyRapid oscillation rate
- latencyDelay in system response
- exploitNotable act or abuse
capture · lock-in · execution · timing · speed · automation · co-location · scalping
Three-cornered in form
- statisticalRelating to data analysis
- mergerCorporate combination
- pairsMatched sets of two
- convergenceProcess of approaching sameness
regulatory · tax · index · convertible · risk-free · spatial · temporal · covered
Trader exploiting price discrepancies
- traderOne who transacts commercially
- speculatorOne wagering on outcomes
- quantFinancial modeling specialist
- dealerOne who sells goods
forex
Currency trading market
- securitiesTradeable financial assets
- commoditiesTradeable raw materials
- futuresContracts for future delivery
options · bonds · equities · derivatives · swaps · cryptocurrency · ETF · ADR · spot · forward
mispricing
Incorrect cost assignment
- inefficiencySuboptimal use of resources
- differentialRelative difference between things
- spreadTo distribute widely
discrepancy · imbalance · divergence · gap · disparity · asymmetry · dislocation · anomaly · deviation · variance
simultaneous
Happening at same time
- algorithmicFollowing programmed steps
- high-frequencyRapid oscillation rate
- latencyDelay in system response
exploit · capture · lock-in · execution · timing · speed · automation · co-location · scalping · rapid
triangular
Three-cornered in form
- statisticalRelating to data analysis
- mergerCorporate combination
- pairsMatched sets of two
convergence · regulatory · tax · index · convertible · risk-free · spatial · temporal · covered · uncovered
arbitrageur
Trader exploiting price discrepancies
- traderOne who transacts commercially
- speculatorOne wagering on outcomes
- quantFinancial modeling specialist
yield
Produce or relinquish
- business termsfranchising, revenue stream, board meeting, gross margin, markdown
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- financebank, CFO, banks, controller, finance
- bettingbet, ante, wager, odds, stake
- finance termsnet profit, gross profit, budget, credit, debt
- investingstocks, stock, bonds, investing, investor
- binding arbitrationLegally enforceable private judgment
- legal arbitrationPrivate dispute settlement process
- forced arbitrationRequired private dispute settlement
- mandatory arbitrationRequired private dispute settlement
- arbitration boardPanel resolving formal disputes
- arbitration panelBody resolving disputes privately