arbitrage

American  

[ahr-bi-trahzh, ahr-bi-trij] / ˈɑr bɪˌtrɑʒ, ˈɑr bɪ trɪdʒ /

noun

1. Finance. the simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices.

2. Archaic. arbitration.

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verb (used without object)

arbitraged, arbitraging

1. Finance. to engage in arbitrage.

arbitrage British  

/ ˈɑːbɪˌtrɑːʒ, ˈɑːbɪtrɪdʒ, ˌɑːbɪtræˈʒɜː /

noun

1. finance

   1. the purchase of currencies, securities, or commodities in one market for immediate resale in others in order to profit from unequal prices

   2. ( as modifier )

      arbitrage operations

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Other Word Forms

• arbitrageur noun

Etymology

Origin of arbitrage

1470–80; < Middle French, equivalent to arbitr ( er ) to arbitrate, regulate (< Latin arbitrārī; arbitrate ) + -age -age

Example Sentences

Otherwise, the system creates incentives for regulatory arbitrage, in which firms migrate toward structures that minimize governmental oversight of risks.

From MarketWatch

Merger arbitrage traders boost that with borrowed money, so why are they wary?

From The Wall Street Journal

Big deals, such as the one concerning Warner Bros., tend to have wider spreads since they tax the capital of the takeover arbitrage community.

From Barron's

Our “time arbitrage” strategy, which monetizes short-term volatility for long-term gain, provides a simple framework.

From Barron's

Their real challenge—learning how to arbitrage sovereignty and openness in a fragmented and asymmetric global economy—is far more demanding.

From Barron's