GlossaryIntermediate

Arbitrage

Profiting from a temporary price difference for the same asset across markets.

Arbitrage means simultaneously buying an asset where it's priced lower and selling it where it's priced higher, profiting from a temporary price difference across markets.

In crypto, arbitrage opportunities across exchanges or protocols tend to be brief, since traders and automated systems that spot the difference generally act on it quickly, which helps prices converge again.

Examples

Buying an asset on one exchange and immediately selling it on another at a higher price is a simple arbitrage example.
Automated trading strategies are often used to identify and act on arbitrage opportunities quickly.