Arbitrage

Origin

Borrowing from fr {{2}} arbitrage, from arbitrer ("to arbitrate"); see arbitrate.

Full definition of arbitrage

Noun

1. (economics) A market activity in which a commodity is bought and then resold quickly, for a profit which substantially exceeds the transaction cost.
• But in recent years, for reasons we shall develop later, the field of "arbitrages and workouts" became riskier and less profitable.

Derived terms

• arbitrageur

Related terms

• arbiter
• arbitrable
• arbitrary
• arbitrate
• arbitration
• arbitrator

Verb

1. (intransitive, finance) To employ arbitrage
• He has arbitraged by purchasing in one market and simultaneously selling the same or similar merchandise in another market.
2. (transitive, finance) To engage in arbitrage in, between, or among
• 2001, Frederic S. Mishkin, Prudential Supervision: What Works and what Doesn't, Indeed, as banks become more adept at internal risk classifications, their incentives to arbitrage economic and regulatory capital can only increase----