Xforex FX Glossary Z

Arbitrage

Creating a risk-less profit, by means of rate differences between different markets.

Many products, including currencies, are traded simultaneously in many markets across the globe. Sometimes there are price differences between products on different markets, which one can exploit and make a risk-free profit. The information is exploited by buying and selling simultaneously in two markets. One can buy and sell foreign currencies, securities or commodities. Sometimes an arbitrage profit can even be made within the same market (country) that has various market-makers .
© All rights reserved to XForex.com (trading name of OCM Online Capital Markets Ltd) | 2003