Market Arbitrage

Market Arbitrage

An investment strategy that attempts to profit from inefficiencies in price by making transactions that offset each other. For example, one may buy a security at a low price and, within a few seconds, re-sell it to a willing buyer at a higher price. Arbitrageurs can keep prices relatively stable as markets attempt to resist their attempts at price exploitation. They often use computer programs because their transactions can be complex and occur in rapid succession.