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Investing Glossary:
Arbitrage
Copyright 2009,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| Term: |
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| Definition: |
| Arbitrage is the simultaneous buying and selling of two or more different, but closely related securities, in different markets to Take advantage of price disparities. The simultaneous buying and selling of a security at two different prices in two different markets, resulting in profits Without risk. Perfectly efficient markets present no Arbitrage opportunities. Perfectly efficient markets seldom exist, but, arbitrage opportunities are often precluded because of transactions costs.
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