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Arbitrage is buying and selling assets across different markets to profit from price differences. It exploits market inefficiencies.

Arbitrage is a trading strategy that involves buying and selling assets across different markets to capitalize on price discrepancies. This practice takes advantage of market inefficiencies, where the same asset is priced differently in separate exchanges or locations. Traders buy the asset at a lower price in one market and sell it at a higher price in another, pocketing the difference as profit. Arbitrage helps in maintaining market efficiency by equalizing prices across exchanges. It requires quick action and precise execution, often facilitated by advanced algorithms and technology in today's fast-paced financial environment.