TradingIntermediate

Arbitrage

Attempting to capture price differences between related assets, markets or trading routes.

PLAIN-ENGLISH DEFINITION

In more detail

An asset can trade at different prices in two pools at the same moment. Arbitrage tries to use that gap, often helping bring prices closer together. The headline difference is not the final result: fees, execution timing, inventory and settlement problems can consume the apparent profit.

IN THE WILD

How you might use it

"Pool A is cheaper than pool B." The trader checks whether buying in A and selling in B leaves anything after the route's costs.

Two markets have different quote markers while a connecting route pays costs, passes a timing device and leaves a small uncertain result.
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By Crypto Dictionary · Published · Updated

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