arbitrage
Americannoun
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Finance. the simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices.
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Archaic. arbitration.
verb (used without object)
noun
Other Word Forms
Etymology
Origin of arbitrage
1470–80; < Middle French, equivalent to arbitr ( er ) to arbitrate, regulate (< Latin arbitrārī; see arbitrate) + -age -age
Explanation
"Buy low, sell high" is the mantra of the stock market. Perhaps the most extreme example of this is arbitrage, the act of buying and selling goods simultaneously in different markets to gain an immediate profit. Impressive, but tricky. Although the meaning of the word arbitrage as used today is relatively new, dating back to the late 19th Century, the word itself can be traced back to the Latin arbitrārī, with the meaning "to regulate." In English, arbitrage first meant "using personal judgment." If you practice arbitrage, you'll need to use great personal judgment in dealing with varying stock prices. Remember to pronounce the last syllable "trahzh," as if it were French.
Vocabulary lists containing arbitrage
The World Is Flat
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Americanah
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The Big Short
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Example Sentences
Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.
See Examples For:
“There is this multiple arbitrage while the market hasn’t quite begun valuing DCC’s remaining energy business correctly,” Stifel’s Williams said.
From The Wall Street Journal ● Jul. 2, 2026
The harvest was a series of crises, notably the 1998 collapse of the hedge fund Long Term Capital Management, which was founded by Nobel economics laureates to pursue abstruse arbitrage trades.
From Los Angeles Times ● Jun. 25, 2026
Hedge funds may be reluctant to join in, as arbitrage is harder for SpaceX than most stocks that join an index.
From The Wall Street Journal ● Jun. 14, 2026
This is one of the largest takeover arbitrage situations, and arbitrage specialists collectively have a limited pool of capital to allocate to one transaction.
From Barron's ● Jun. 9, 2026
He suspected, not unreasonably, that he might be the only person in Berkeley looking for arbitrage opportunities in the market for credit derivatives.
From "The Big Short" by Michael Lewis
I was selling a car that I had arbitraged to rent out on Turo, which turned out to be a poor investment.
From Los Angeles Times ● Apr. 11, 2025
Instacart had arbitraged customer anger onto the most vulnerable people in the system.
From The Verge ● May 26, 2020
Another puzzle with anomalies is why they are not arbitraged away.
From Economist ● Feb. 1, 2018
It got arbitraged away by greedy investors who hunted it to extinction once the word got out.
From Forbes ● Jan. 26, 2015
Derman used to be a "quant," one of the nerdy rocket scientists who built models of how markets work and how they can be arbitraged.
From Reuters ● Jan. 27, 2012
Alameda found early trading success by arbitraging cryptocurrency prices on international markets, with half of profits going to charity, according to the same profile.
From Reuters ● Nov. 16, 2022
He noticed the variations in the value of Bitcoin across different cryptocurrency exchanges and started arbitraging - buying Bitcoin from places selling it cheap and selling to other places where it was trading for more.
From BBC ● Nov. 13, 2022
“We definitely are a part of bringing the prices down, there’s no question about that, because we are arbitraging factories and countries all the time,” he said.
From New York Times ● Aug. 8, 2013
That was bad offshoring: arbitraging of labor costs.
From Forbes ● Feb. 11, 2013
For after all, all cabling, arbitraging in exchange, drawing of finance bills, etc., is only incidental.
From Elements of Foreign Exchange A Foreign Exchange Primer by Escher, Franklin
Definitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023
Idioms from The American Heritage® Idioms Dictionary copyright © 2002, 2001, 1995 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company.
