LeoGlossary: Arbitrage
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The buying of an asset on one exchange and selling it on another.
Ideally, the price purchased is lower than the price sold on the other exchange.
Arbitrage is an important part of the price discovery process as traders look to leverage when prices get out of alignment.
Those who are engaging in arbitrage, if successful, will help to bring prices back in line with each other. At the same time, traders will be able to make a profit for themselves.
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