OptionAutomator Options Trading Glossary:

Definition, Examples & Resources:Arbitrage'

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What is Arbitrage in Options Trading ?

Theoretically, a risk-free strategy where financial instruments are bought and sold simultaneously to benefit from price differences. Arbitrage is a temporal state of market inefficiency and usually doesn't last for any long periods of time because they are detected nearly immediately by extremely clever high-frequency trading algorithms before traders can take full advantage. Arbitrage traders keep an eye on markets for these price discrepancies in different exchanges.

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