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Glossary

From A to Z, discover clear and concise explanations of key terms, empowering you to make informed decisions in the dynamic world of finance with our comprehensive glossary.

Arbitrage is the practice of profiting from taking advantage of a price difference between two or more markets or assets, with no cost implication. Examples would include buying a share on one stock exchange and selling it on another for profit; or exploiting currency weakness, such as borrowing cheap currency with low interest rates, such as the yen, convert into a currency with higher interest rates and then buying various securities in that currency - the traders profit from the difference between their high yield investment and the low interest rate on the yen. This is called carry trade.