
Arbitrage Trading
Arbitrage trading involves taking advantage of price differences for the same asset across different markets. Traders buy the asset where it's undervalued and sell where it's overvalued, making a profit from the discrepancy. This process requires quick execution and accurate market analysis, and it helps ensure prices stay aligned across platforms. Essentially, arbitrage exploits temporary price gaps to generate risk-free or low-risk returns, contributing to market efficiency.