What is ARBITRAGE? Should I do it?


Arbitrage is a trade done when there is a spread on any security

There are two main types of arbitrage: 1. Risk-free arbitrage When a security is traded on two different markets simultaneously and there is a spread between the prices. George Soros is famous for doing this type of arbitrage 2. Risk arbitrage If a company wants to acquire another one at a certain price and there is a spread between that price and the current stock price. Warren Buffett makes this type of arbitrage trades.

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