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

This past month, while options markets were abuzz with traders trying to find an arbitrage opportunity in shares of Warner Bros.

From Barron's

“As far as the taxpayer is concerned, it doesn’t matter where they pay taxes when there is no longer rate arbitrage,” said McDonald, the former Treasury official.

From The Wall Street Journal

At the same time, merger arbitrage funds have entered the stock in greater numbers, building large positions as the deal spread has begun to turn on regulatory timing and bidder reliability.

From Barron's

But here’s the critical distinction: These publicly traded companies benefit from the shortage itself — not from the temporary arbitrage window created by aggregating idle distributed capacity.

From MarketWatch

Card issuers like keeping customers engaged, but also don’t want people who arbitrage rewards in ways that cost them money.

From The Wall Street Journal