Arbitrage
noun, verb ·Uncommon ·Advanced level
Definitions
- 1 A market activity in which a security, commodity, currency or other tradable item is bought in one market and sold simultaneously in another, in order to profit from price differences between the markets. countable, uncountable
"But in recent years, for reasons we shall develop later, the field of "arbitrages and workouts" became riskier and less profitable."
- 2 a kind of hedged investment meant to capture slight differences in price; when there is a difference in the price of something on two different markets the arbitrageur simultaneously buys at the lower price and sells at the higher price wordnet
- 3 Arbitration. archaic, countable, uncountable
- 1 To employ arbitrage intransitive
"He has arbitraged by purchasing in one market and simultaneously selling the same or similar merchandise in another market."
- 2 practice arbitrage, as in the stock market wordnet
- 3 To engage in arbitrage in, between, or among transitive
"Indeed, as banks become more adept at internal risk classifications, their incentives to arbitrage economic and regulatory capital can only increase"
Example
More examples"He had been British Consul in Holland, and had seen the workings of the Amsterdam Bourse and the arbitrage business between London and Amsterdam, which was considerable in the middle of the eighteenth century."
Etymology
An unadapted borrowing from French arbitrage, from arbitrer (“to arbitrate”); see arbitrate.
Related phrases
More for "arbitrage"
Data sourced from Wiktionary, WordNet, CMU, and other open linguistic databases. Updated March 2026.