Arbitrage Definition

Arbitrage is the act of ‘buying low’ and ‘selling high’ – at the same time!! Rather than the traditional idea of buying something while it is cheap and then holding on to it until it is worth more, arbitrage involves finding a product which is cheap in one place and expensive in another, and buying from the cheap place to sell at the expensive place, but doing it all in a way so that there is no exposure to risk.

It is defined on dictionary.com as the simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices.

Mirriam-Webster defines it as the nearly simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies.

Sports Arbitrage

Sports arbitrage is a special circumstance of arbitrage which has arisen thanks to the online sports betting industry. It is taking advantage of the immediacy of data transfers through the internet, to compare prices offered on international sporting events between bookmakers from around the world. If you can get a high value bet on all complimentary outcomes of an event, then you can lock in a guaranteed profit.

Tagged as: arbitrage, define, definition