Definitions

from The American Heritage® Dictionary of the English Language, 5th Edition.

  • noun The simultaneous purchase and sale of equivalent assets or of the same asset in multiple markets in order to exploit a temporary discrepancy in prices.
  • intransitive verb To be involved in arbitrage.

from The Century Dictionary.

  • noun Arbitration. R. Cobden.
  • noun The calculation of the relative value at the same time, at two or more places, of stocks, bonds, or funds of any sort, including exchange, with a view to taking advantage of favorable circumstances or differences in payments or other transactions; arbitration of exchange.
  • noun The business of bankers which is founded on calculations of the temporary differences in the price of securities, and is carried on through a simultaneous purchase in the cheaper and sale in the dearer market.

from the GNU version of the Collaborative International Dictionary of English.

  • noun Archaic Judgment by an arbiter; authoritative determination.
  • noun (Com.) A traffic in bills of exchange (see Arbitration of Exchange).
  • noun (Finance) the simultaneous or near simultaneous purchase and sale of the same or closely linked securities or commodities in different markets to make a profit on the (often small) differences in price.

from Wiktionary, Creative Commons Attribution/Share-Alike License.

  • noun The practice of quickly buying and selling foreign currencies in different markets in order to make a profit
  • noun The purchase of the stock of a future takeover target, with the expectation that the stock will be sold to the person executing the takeover at a higher price
  • noun Any market activity in which a commodity is bought and then sold quickly, for a profit which substantially exceeds the transaction cost
  • verb intransitive, finance To employ arbitrage
  • verb transitive, finance To engage in arbitrage in, between, or among

from WordNet 3.0 Copyright 2006 by Princeton University. All rights reserved.

  • noun a kind of hedged investment meant to capture slight differences in price; when there is a difference in the price of something on two different markets the arbitrageur simultaneously buys at the lower price and sells at the higher price
  • verb practice arbitrage, as in the stock market

Etymologies

from The American Heritage® Dictionary of the English Language, 4th Edition

[Middle English, arbitration, from Old French, from arbitrer, to judge, from Latin arbitrārī, to give judgment; see arbitrate.]

from Wiktionary, Creative Commons Attribution/Share-Alike License

From French arbitrage, from arbitrer ("to arbitrate"); see arbitrate.

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Examples

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  • Money gained by rent-seekers and other unproductive people

    September 18, 2007

  • Used in finance to describe the purchasing and immediate selling of goods or stocks to take advantage of momentary price fluctuations.

    September 19, 2007