Cryptocurrency Q&A
Is arbitrage trading risk free?
Is arbitrage trading risk free?
GwanghwamunPride
Tue Dec 10 2024
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5 answers
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I'm wondering if arbitrage trading is completely risk-free. I've heard that it's a way to profit from price differences in different markets, but I'm not sure if there are any risks involved.
5 answers
DondaejiDelight
Thu Dec 12 2024
An arbitrage fund operates by exploiting price differences of the same security or its derivative across various markets.
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Dario
Thu Dec 12 2024
By buying the security in a market where it is cheaper and selling it in a market where it is more expensive, the fund aims to generate profits.
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Elena
Wed Dec 11 2024
These profits are considered risk-free as the fund is merely taking advantage of market inefficiencies.
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GliderPulse
Wed Dec 11 2024
For instance, if Reliance Industries (RIL) shares are trading at a lower price in one market compared to another, an arbitrage fund would purchase the shares in the cheaper market.
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TaegeukChampion
Wed Dec 11 2024
Subsequently, the fund would sell the RIL shares in the more expensive market, pocketing the difference as profit.
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