What is Arbitrage?

Answer:
Arbitrage is an investment strategy that involves

purchasing and selling securities in two different markets at the same time for different prices. The person engaging in arbitrage would buy a security in the market where it is selling for a lower price, and sell it in another market where it is going for a higher rate.

The security is sold immediately following the purchase, so the investor doesn’t experience any significant risk of losing money and has a chance of making a profit, depending on the degree of price difference from one market to another. The per share profit margin is generally very small, and it can be difficult for individual investors to enjoy significant gains due to transaction fees.