 |
Definition of 'Arbitrageur'
A type of investor who attempts to profit from price inefficiencies in the market by making simultaneous trades that offset each other and capturing risk-free profits. An arbitrageur would, for example, seek out price discrepancies between stocks listed on more than one exchange, and buy the undervalued shares on one exchange while short selling the same number of overvalued shares on another exchange, thus capturing risk-free profits as the prices on the two exchanges converge.
|
 |
Investopedia explains 'Arbitrageur'
Arbitrageurs are typically very experienced investors since arbitrage opportunities are difficult to find and require relatively fast trading. Arbitrageurs also play an important role in the operation of capital markets, as their efforts in exploiting price inefficiencies keep prices more accurate than they otherwise would be.
|
-
This high-risk strategy attempts to profit from price discrepancies that arise during acquisitions.
Read More »
-
This influential strategy capitalizes on the relationship between price and liquidity.
Read More »
-
This stock/options combination helps traders take advantage of market mispricing. Find out how.
Read More »
-
-
Profiting from arbitrage is not only for market makers--retail traders can find opportunity in risk arbitrage.
Read More »
-
Look at trades that are profitable when the value of corresponding puts and calls diverge.
Read More »
-
Read More »
-
The efficient market hypothesis (EMH) suggests that stock prices fully reflect all available information in the market. Is this possible?
Read More »
-
Deciding whether it's possible to attain above-average returns requires an understanding of EMH.
Read More »
-
Here we look at some of the landmark incidents of insider trading.
Read More »
|
|
