1. | strategy

The practice of exploiting price differences across multiple markets to buy low from one, and sell high in the other for profit.

Arbitrage is a common trading technique - especially with automated trading strategies - which help stabilize the price of an asset. When an asset is sold too high or too low on any market, arbitrage opportunities appear and traders profit on the difference until the price stabilizes.

1.1 example

Exchange A: Sell order of 1 DOGE for $0.06
Exchange B: Buy order of 1 DOGE for $0.08
Trader: Buys 1 DOGE on B, and sells 1 DOGE on A. Securing a $0.02 profit from arbitrage. 🎊

* All terms and definitions will change as the Cryptionary improves