Merger arbitrage is the purchase and sale of the stocks of two merging companies at the same time with the goal of creating "riskless" profits. Arbitrage in layman's terms is the possibility to make money with no risk.More specifically, it is the simultaneous purchase and sale of something. Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from a difference in its price. Compute the arbitrage profit. Arbitrage strategy (intuitive definition):. 1. You will be required to advise a client on the performance of their investment in equity shares, an arbitrage opportunity and their super fund. Both measures outlined here are highly correlated, thus using the second definition does not affect the results significantly. Arbitrage is the strategy of taking advantage of price differences in different markets for the same asset. Casts a wide net with the definition of LST, one that includes beneficial forms of HFT as well.