arbitrage

Definitions

Accounting

  • noun the business of making a profit from the difference in value of various assets, e.g. by selling foreign currencies or commodities on one market and buying on another at almost the same time to profit from different exchange rates, or by buying currencies forward and selling them forward at a later date, to benefit from a difference in prices

Economics

  • noun the making of a profit from the difference in value of various assets. Means include: selling foreign currencies or commodities on one market and buying on another at almost the same time to profit from different exchange rates; buying currencies forward and selling them forward at a later date, to benefit from a difference in prices; buying a security and selling another security to the same buyer with the intention of forcing up the value of both securities.

Forex

  • A forex strategy in which a trader profits from different spreads offered by brokers for the same pair of currencies. For example, suppose that Bank A was offering to exchange euros and dollars at a rate of 2:3 and Bank B was offering the same exchange at a rate of 4:5. A trader would exchange dollars for euros at Bank B and then exchange euros for dollars at Bank A.

Health Economics

  • (written as Arbitrage)
    The practice of exploiting price differences between two or more markets: matching deals are struck that leave a profit - the difference be tween the market prices minus the transaction costs. One who engages in arbitrage is called an arbitrageur.
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