Riskless arbitrage

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Riskless arbitrage

The simultaneous purchase and sale of the same asset to yield a profit.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Riskless Arbitrage

The act of buying an asset and immediately selling the same asset for a higher price. For example, one may execute two orders at once, one to buy a security at $10 and one to sell the same security at $12. The short time frame involved means that riskless arbitrage occurs without investment; there is no rate of return or anything like it because the asset is immediately sold. One simply makes a profit on the deal.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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