Arbitrageur
Barron's Finance & Investment Dictionary:
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Arbitrageur
person or firm engaged in arbitrage. Arbitrageurs attempt to profit when the same security or commodity is trading at different prices in two or more markets. Those engaged in risk arbitrage attempt to profit from buying stocks of announced or potential Takeover targets. Also called Arb.
| Arbitrage Pricing Theory (APT), Arbitrage Bonds | |
| Arbitration, Arbitration Panel |
Investopedia Financial Dictionary:
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Arbitrageur
A type of investor who attempts to profit from price inefficiencies in the market by making simultaneous trades that offset each other and capturing risk-free profits. An arbitrageur would, for example, seek out price discrepancies between stocks listed on more than one exchange, and buy the undervalued shares on one exchange while short selling the same number of overvalued shares on another exchange, thus capturing risk-free profits as the prices on the two exchanges converge.
Investopedia Says:
Arbitrageurs are typically very experienced investors since arbitrage opportunities are difficult to find and require relatively fast trading. Arbitrageurs also play an important role in the operation of capital markets, as their efforts in exploiting price inefficiencies keep prices more accurate than they otherwise would be.
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Barron's Finance & Investment Dictionary
Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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