A-Z Popular New Business Search »
Business
 
Related Guides
Advertising
Branding
Competition
Metrics
Business Models
Added Value
Agent
Arbitrage
top   »  business   »  business models   »  arbitrage

What is Arbitrage?

 , updated on
Arbitrage is the practice of taking advantage of price differences in two or more markets in a way that's risk free. Its a fundamental concept in economics that's used to explain how markets work.
Since arbitrage is theoretically risk free, the term isn't used to describe global trade in goods. If you buy apples in Canada and sell them in Japan to take advantage of a price difference, this usually entails a fair amount of risk. Examples of arbitrage tend to be financial in nature such as taking advantage of price difference in a stock that trades on two different exchanges. In many cases, arbitrage is executed at high speed by technologically advanced firms in the market. Although in economic theory arbitrage is risk-free in practice it does entail risks.
Overview: Arbitrage
Type
Economics
Business Model
Definition
Buying and selling to take advantages of prices differences between markets.
Effect
Arbitrage brings prices to a similar levels in multiple markets. For example, if you buy a stock that trades in both New York and London you can typically assume that the prices are similar.
Related Techniques
Market Maker

Business Models

This is the complete list of articles we have written about business models.
Added Value
Aftermarket
Agent
Arbitrage
Auctioneering
Barter
Augmented Product
Bespoke
Bricks And Clicks
Business Markets
Business Products
Business Services
C2B
Club Goods
Coercive Monopoly
Collective Business
Concession
Complement Good
Consumer Business
Consumer Goods
Collectives
Consumer Services
Cottage Industry
Creative Services
Digital Business
C-to-C
Digital Services
Convenience Good
Ebusiness
FMCG
Gig Economy
Middleman Cutting
Global Business
Designer Label
Haute Couture
Digital Goods
Intermediary
Long Tail
Fast Fashion
Market Maker
Financial
Middleman
Niche
One Stop Shop
Productization
Recommerce
Retail
Managed Services
Services
Used Goods
Markets
White Label
Micropayments
Microtransactions
Modular Products
Original Equipment Manufacturer
Product-as-a-Service
Razor And Blades
Store Within A Store
Two Sided Market
Utility Computing
VAR
More ...
If you enjoyed this page, please consider bookmarking Simplicable.
 
Cite »

Business Models

A list of common business models.

Bricks And Clicks

A retailing strategy that combines physical locations with a strong ecommerce presence.

Complementary Goods

A definition of complementary goods with several examples.

Collective Business System

An organization that represents businesses or professionals that have something in common.

Product vs Service

The business difference between products and services.

Business Model Examples

A few examples of common business models.

Business Model Definition

The definition of business model.

Scalable Business Model

A definition of scalable business model with several examples.

Two-sided Market

A definition of two-sided market with examples.

Product Strategy

A checklist for developing a product strategy.

Pricing Strategy

An overview of common pricing strategies.

Product Value

A definition of product value with examples.

Premiumisation

The common types of premiumisation.

Product Demand

The basic types of product demand.

Marketing Myopia

A definition of marketing myopia with examples.

Product Extension

The definition of product extension with examples.

Product Market

An overview of product markets with examples.

Product Culture

An overview of product culture with examples.

Product Marketing

A guide to product marketing.

Product Features Examples

A list of common product features.

Product Planning

An overview of product planning with examples.

Go-To-Market Strategy

An overview of go-to-market strategy with examples.

Product Metrics

A list of common product metrics.

Trending

The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map
About
Architecture
Behavior
Branding
Business
Business Analysis
Business Disadvantages
Business Strategy
Cities
Color Theory
Colors
Communication
Computing
Creativity
Culture
Customer Experience
Customer Service
Data
Decision Making
Design
Design Thinking
Economics
Education
More ...
© 2010-2024 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.

View credits & copyrights or citation information for this page.

Home About     Privacy Policy     Cookies Terms of Use     Contact Us Search


Cookies help us deliver our services. You have choices regarding these cookies. Please visit our privacy policy, cookie policy and consent tool to learn more.


Copyright 2002-2024 Simplicable. All rights reserved. This material may not be published, broadcast, rewritten, redistributed or translated. Report violations here.