#ArbitrageTradingStrategy #ArbitrageTradingStrategy

Arbitrage trading involves simultaneously buying and selling an asset to profit from tiny price discrepancies across different markets. It's considered a low-risk strategy because the profit is locked in almost instantly. For example, if a stock trades at $100 on Exchange A and $100.05 on Exchange B, an arbitrageur would buy on A and sell on B. While simple in theory, execution speed is crucial. Opportunities are fleeting and often require high-frequency trading algorithms. Risks include transaction costs eroding profits and liquidity issues preventing full execution. Various forms exist, including spatial, triangular, and merger arbitrage, each exploiting different market inefficiencies.