arbitraazi

Arbitraazi refers to the practice of exploiting price differences for the same asset in different markets. This strategy typically involves simultaneously buying an asset in one market and selling it in another where the price is higher. The profit is realized from the difference between the buying and selling prices, minus any transaction costs. Arbitraazi is a risk-free strategy in theory, as the trades are executed at virtually the same time, locking in the profit margin.

For arbitraazi to be possible, several conditions must be met. First, the same asset must be trading in at least two different markets. Second, there must be a price discrepancy between these markets. Third, the transaction costs, including fees and the bid-ask spread, must be lower than the price difference. Finally, the markets must be efficient enough to allow for quick execution of both the buy and sell orders.

The existence of arbitraazi opportunities is often short-lived. As traders identify and exploit these price differences, their actions tend to push the prices in the respective markets closer together. This process, known as market convergence, helps to ensure that prices across different markets remain relatively consistent. Arbitraazi plays a crucial role in maintaining market efficiency by correcting price discrepancies and ensuring that assets are priced uniformly across various exchanges. It is commonly observed in financial markets like stock exchanges, currency markets, and cryptocurrency exchanges.