Igbaji Chinwendu Staff answered 5 years ago
Taking advantage of a difference in price of the same commodity on two different exchanges. Often mentioned when it comes to comparing ETH prices on Korean exchanges against US exchanges.Arbitrage
Meaning: Arbitrage means taking advantage of a difference in price of the same commodity or instrument on two different exchanges. For instance, if a cryptocurrency is being sold for USD 10.00 at Exchange A, and being bought for USD 10.50 at Exchange B, the arbitrage opportunity would be to buy the cryptocurrency at Exchange A and then immediately sell it at Exchange B. The arbitrage profits would then be USD 0.50.
Term used in a sentence: Have you heard that the updates of centralized exchange X’s market price for cryptocurrencies that they sell themselves is lagging behind? Sometimes up to a minute. I’m definitely going to try some arbitrage trading there.