What is 'Arbitrage'?
Arbitrage signifies the process of buying a cryptocurrency on an exchange where the price is relatively low and sell it on another exchange where the price is higher. Through arbitraging traders try to maximize profits from unavoidable price differences between different exchanges.
Arbitrage traders are typically using funds or large stakes of money, as price differences are very small. Moreover not all markets or assets go with such trades. It has to be a market with low market barriers meaning that transactions costs have to be low and predictable while the information of all investors of the market has to be complete. Arbitrage trading is a typical short-term investment method without any risks, as price differences and arbitrages between exchanges are unavoidable. Still, it has to be said, that arbitraging is not something for beginners as you have to keep track of different prices all day long while arbitrages will regularly only be available for a few seconds..