Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from a difference in its price. Arbitrage is when an asset (stocks, currencies, etc.) is bought in one market and sold in another for a higher price.Arbitrage can be defined as the concurrent purchase and sale of similar assets in different markets in order to take advantage of price differentials. An arbitrage involves buying an asset on one market while simultaneously selling the same asset on another market for a higher price. The profit from buying something in one market and selling it in another. Arbitrage is the buying and selling of assets, profiting from the price difference between the price paid to buy and the price at the time of sale. Thus, municipalities could use the tax code to finance projects and make money from investing bond proceeds at the same time. NA is also a necessary condition for an equilibrium in the financial markets. Very ShortTerm: Arbitrage trades aim to lock in tiny profits and close out positions as soon as possible before prices converge again. Arbitrage is a function of generating income from trading particular currencies, securities, and commodities in two different markets.