arbitrageur
Market gap trader
An arbitrageur is a trader who profits from price differences for the same asset in different markets—buying where it's cheap and selling where it's dear.
The practice, arbitrage, exploits temporary inefficiencies: Arbitrageurs swooped in when the stock traded at different prices on the two exchanges.
The term often appears in financial news during mergers, when arbitrageurs bet on deal outcomes.
Incorrect cost assignment
- inefficienciesFailures to optimize
- spreadTo distribute widely
- exploitationSelfish use of others
- discrepanciesDifferences where agreement expected
simultaneous · pricing · divergence · convergence · hedging · leverage · risk-free · statistical
One who transacts commercially
- speculatorOne wagering on outcomes
- dealerOne who sells goods
- investorOne who allocates capital
- brokerTransaction intermediary for hire
Currency trading market
- equitiesOwnership stakes in corporations
- bondsTies that unite
- derivativesThings derived from another
- futuresContracts for future delivery
options · commodities · securities · cryptocurrency · swaps · indices · warrants · cds
To distribute widely
- opportunityFavorable circumstance for advancement
- gainPositive return received
- returnGo back again
- yieldProduce or relinquish
State of being unprotected
- volatilityRapid, unpredictable changeability
- counterpartyOther side in deals
- liquidityConvertibility to cash
- executionCompleting a planned task
slippage · regulatory · leverage · timing
mispricing
Incorrect cost assignment
- inefficienciesFailures to optimize
- spreadTo distribute widely
- exploitationSelfish use of others
discrepancies · simultaneous · pricing · divergence · convergence · hedging · leverage · risk-free · statistical · merger
trader
One who transacts commercially
- speculatorOne wagering on outcomes
- dealerOne who sells goods
- investorOne who allocates capital
forex
Currency trading market
- equitiesOwnership stakes in corporations
- bondsTies that unite
- derivativesThings derived from another
futures · options · commodities · securities · cryptocurrency · swaps · indices · warrants · cds
spread
To distribute widely
- opportunityFavorable circumstance for advancement
- gainPositive return received
- returnGo back again
exposure
State of being unprotected
- volatilityRapid, unpredictable changeability
- counterpartyOther side in deals
- liquidityConvertibility to cash
execution · slippage · regulatory · leverage · timing
bourse
Securities trading venue
- exchangeMutual giving and receiving
arbitrageurspeculator
One wagering on outcomes
gambler · venture capitalist · day trader · swing trader · risk-taker