Arbitrage trading is a strategy that exploits price differences of the same asset across different markets. Traders buy an asset where it's undervalued and simultaneously sell it where it’s overvalued, securing a risk-free profit. This method relies on speed, precision, and low transaction costs. Common forms include spatial arbitrage, triangular arbitrage, and statistical arbitrage. In crypto markets, price discrepancies often arise between exchanges due to liquidity variations. High-frequency trading bots are frequently used to execute these trades within milliseconds. Though the profit per trade is small, frequent execution can yield consistent gains, making arbitrage an appealing low-risk trading approach.

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