Definition

To take advantage of price differences in different markets to make a profit.

Example

Investors often engage in arbitrage to maximize their returns.

Tense Forms

Conversation

Have you ever thought about how people arbitrage different markets?

Yeah, I read about it once; it sounds really interesting!

It is! I wonder how much money someone can make by arbitrage opportunities.

I guess it depends on the market, but it must be quite profitable!

Synonyms & Antonyms

Definition

The act of buying and selling assets in different markets to take advantage of price differences and make a profit.

Example

Investors often use arbitrage to capitalize on price discrepancies between markets.

Conversation

Have you heard about arbitrage in the stock market?

Yeah, it's when you buy stocks in one place and sell them in another for profit, right?

Exactly! I think it’s a smart way to take advantage of price differences.

Root Explanation

Arbitrage → It is formed from "arbitrare" (meaning to judge or decide) and the suffix "-age" (indicating a process or action). The word refers to the process of judging or deciding on price differences in different markets to make a profit.

Memory Tip

Think of 'judging' ('arbitrare') the differences in prices to make a profit — that's what arbitrage means.

Visually Confused Words