Arbitrage is an investment technique in which an asset or security is bought and immediately sold for a profit. It has specific criteria that make it a trading method, as it must be done within the market in which the traded asset exists.

It is a very successful trading method as it has a high probability of having a positive outcome and can be done virtually at no cost.  Arbitrage is trading with the intent to make a profit

The basic concept of arbitrage is to profit from any price discrepancy between two (or more) markets.

According to the Oxford Finance Dictionary, “Arbitrage is the simultaneous purchase and sale of a financial instrument in order to exploit an opportunity for profit. It arises when a futures contract on an underlying asset is denominated in a different currency than the price of the underlying asset.