Arbitraging: meaning, definitions and examples
๐
arbitraging
[ หษหr.bษช.trษห.dสษชล ]
financial trading
Arbitraging refers to the practice of taking advantage of price differences in different markets for the same asset. This is often done by buying low in one market and selling high in another. The process requires quick decision-making and execution to capitalize on the price discrepancies before they disappear. Arbitraging is commonly seen in the stock market, currency exchange, and commodities trading. It relies on the principles of supply and demand and market efficiency.
Synonyms
arbitrage, exploit, take advantage.
Examples of usage
- He successfully made a profit by arbitraging stocks between two exchanges.
- Arbitraging cryptocurrencies can yield significant returns if done correctly.
- The trader was known for arbitraging prices in the foreign exchange market.
Translations
Translations of the word "arbitraging" in other languages:
๐ต๐น arbitragens
๐ฎ๐ณ เคฎเคงเฅเคฏเคธเฅเคฅเคคเคพ
๐ฉ๐ช Arbitrage
๐ฎ๐ฉ arbitrase
๐บ๐ฆ ะฐัะฑัััะฐะถ
๐ต๐ฑ arbitraลผ
๐ฏ๐ต ใขใผใใใฉใผใธ
๐ซ๐ท arbitrage
๐ช๐ธ arbitraje
๐น๐ท arbitraj
๐ฐ๐ท ์ฐจ์ต ๊ฑฐ๋
๐ธ๐ฆ ุงูุชุญููู
๐จ๐ฟ arbitrรกลพ
๐ธ๐ฐ arbitrรกลพ
๐จ๐ณ ๅฅๅฉ
๐ธ๐ฎ arbitraลพa
๐ฎ๐ธ arbitrage
๐ฐ๐ฟ ะฐัะฑะธััะฐะถ
๐ฌ๐ช แแ แแแแขแ แแแ
๐ฆ๐ฟ arbitraj
๐ฒ๐ฝ arbitraje
Etymology
The term 'arbitrage' originates from the Latin word 'arbitrium', which means 'judgment' or 'decision'. It entered the financial lexicon in the mid-19th century, particularly in Paris, to describe the practice of taking advantage of price differences in different markets. The concept is rooted in the idea of market efficiency, suggesting that price discrepancies occur due to various factors like demand fluctuations, information lags, and market sentiments. Over time, arbitraging evolved with advancements in technology and globalization, allowing traders to access multiple markets and execute trades instantaneously. Today, it encompasses various forms, including currency arbitrage, merchandise arbitrage, and interest rate arbitrage, each focusing on varying assets in different markets.