the.com/arbitrage
buying low here and selling high there, while pretending it's not basically free money
means The practice of profiting from price differences in two or more markets by buying something where it's cheap and simultaneously selling it where it's dear, ideally with little or no risk.
from From French arbitrage, 'arbitration' or 'judgment,' from arbitrer, 'to give a verdict,' which traces back to Latin arbiter, 'a witness, a judge.' The financial sense — weighing prices across markets and rendering your verdict in trades — bloomed in 19th-century French banking before crossing into English. The same Latin arbiter also gives us 'arbitrary' and 'arbitration,' so the word that now means 'risk-free profit' shares a bloodline with the impartial referee.
- french origin
- means arbitration, judging price differences between markets
- speed game
- opportunities can vanish in microseconds now
- risk-free myth
- true arbitrage means guaranteed profit, zero risk
- fiber wars
- firms spent millions shaving milliseconds off cables
- everywhere
- exists in sports betting, crypto, and concert tickets
ltcm collapse 1998 — long-term capital management lost $4.6 billion in weeks despite arbitrage strategy, requiring fed-coordinated $3.6 billion bailout
bitcoin exchange price gaps — mt. gox traded 10-15% above global average in 2013 before collapse, creating massive arbitrage opportunities