Arbitrage

The goal of arbitrage is to generate profits by buying and selling the same asset or instrument simultaneously in different markets, taking advantage of the price difference. Its opportunities arise when the same asset or instrument is priced differently in different markets due to variations in supply and demand, transaction costs, or other factors.

For example, if a coinis trading for $10 on one exchange and $11 on another, an arbitrageur could buy the coin for $10 on the first exchange and sell it for $11 on the second exchange, earning a profit of $1 per coin.

Arbitrage can be conducted manually or through automated trading algorithms, which can quickly execute trades across multiple markets and platforms to take advantage of price differences.