arbitrage

1 of 2

noun

ar·​bi·​trage ˈär-bə-ˌträzh 

1

: the nearly simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies

2

: the purchase of the stock of a takeover target especially with a view to selling it profitably to the raider

arbitrage

2 of 2

verb

arbitraged; arbitraging

intransitive verb

: to engage in arbitrage

Examples of arbitrage in a Sentence

Recent Examples on the Web

Noun

Cantor loved arbitrage and shifted from one thing to the next, always hunting for an advantage. —Dan Alexander, Forbes, 20 Nov. 2024

So far, even Japan and Europe, which have tiptoed into negative rates, have avoided this issue, but there are two solutions that would prevent arbitrage into paper currency. —Kenneth S. Rogoff, Foreign Affairs, 24 Oct. 2022

Verb

As those who engaged in arbitraging globalization prospered, those anchored to local markets grew increasingly marginalized. —Robin Niblett, Foreign Affairs, 30 Mar. 2021

Another potential explanation for these fluctuations is that traders are arbitraging spreads between these assets to make incremental profits on their existing trading strategies. —Steve Larsen, Forbes, 29 Nov. 2023

Word History

Etymology

Noun

borrowed from French, literally, "decision-making, judgment," going back to Old French, "judgment pronounced by an arbiter," from arbitrer "to pass judgment" (borrowed from Latin arbitrārī "to consider, judge, decide," verbal derivative of arbitr-, arbiter "onlooker, arbiter") + -age -age

First Known Use

Noun

1875, in the meaning defined at sense 1

Verb

1857, in the meaning defined above

Legal Definition

arbitrage

noun

ar·​bi·​trage ˈär-bə-ˌträzh 

1

: the purchase of a security, commodity, or foreign currency in one market for the purpose of immediately selling it at a higher price in another market

2

: the purchase of the stock of a takeover target especially for the purpose of selling it to the raider for a profit

Etymology

Noun

French, literally, arbitration, decision-making