Riskless arbitrage

(redirected from Riskless Profits)

Riskless arbitrage

The simultaneous purchase and sale of the same asset to yield a profit.

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.
References in periodicals archive ?
This condition eliminates the possibility of earning riskless profits from the interest rate differential.
Without this factor, investors could make riskless profits through arbitrage operations.