Search Arbitrage Example Imagine, you launch an ad campaign targeting keyword phrases like “budget travel tips.” First, you buy traffic through Google Ads at $0.10 per click. When users see your offer and click on it, they're directed to a landing page with travel-related content and ads.
For example, say lobster costs $8 per pound in Portland, Maine, and $20 per pound in Detroit. This would create an arbitrage opportunity where someone could buy lobster in Portland and sell it in Detroit for a tidy profit. Geographic arbitrage extends this idea to costs of living.
Let's say you bet $100 on the Cubsmoneyline at +110 against the Cardinals at FanDuel. You'd profit $110 with a Chicago win. At the same time, BetMGM lists the Cubs at -105 and the Cardinals -105. You can bet $105 on the Cardinals to win $100, and guarantee either a break-even or $5 profit.
Arbitrage traders help align prices of the same or similar assets across different markets, which benefits the financial ecosystem as a whole. While arbitrage itself is legal, activities like insider trading, front-running, or manipulating markets to create arbitrage opportunities are illegal and subject to penalties.
While arbitrage is generally seen as legal and as contributing to market efficiency and liquidity, arbitrage activities are subject to regulations and securities laws to ensure compliance with market rules and prohibit illegal activities such as insider trading and market manipulation.
Arbitrage trading is not only legal in the United States, but is encouraged, as it contributes to market efficiency. Furthermore, arbitrageurs also serve a useful purpose by acting as intermediaries, providing liquidity in different markets.
And to answer the question – is arbitrage trading legal in India? Yes, it is, if you are taking stock delivery.