arbitrage

¹ar·bi·trage

noun \ˈär-bə-ˌträzh\

Definition of ARBITRAGE

1

: the nearly simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies

2

: the purchase of the stock of a takeover target especially with a view to selling it profitably to the raider

Origin of ARBITRAGE

French, from Middle French, arbitration, from Old French, from arbitrer to render judgment, from Latin arbitrari, from arbitr-, arbiter

First Known Use: 1875

Other Business Terms

amortize, caveat emptor, clearinghouse, divest, due diligence, emolument, green-collar, marque, overhead, perquisite

Rhymes with ARBITRAGE

assemblage, badinage, bon voyage, bricolage, cabotage, camouflage, colportage, curettage, decoupage, empennage, enfleurage, entourage, fuselage, Hermitage, maquillage, moyen-âge, persiflage, repechage, reportage, sabotage, vernissage

²arbitrage

intransitive verb

arbitragedarbitrag·ing

Definition of ARBITRAGE

: to engage in arbitrage

First Known Use of ARBITRAGE

1900

Other Business Terms

amortize, caveat emptor, clearinghouse, divest, due diligence, emolument, green-collar, marque, overhead, perquisite

arbitrage

noun    (Concise Encyclopedia)

Business operation involving the purchase of foreign currency, gold, financial securities, or commodities in one market and their almost simultaneous sale in another market, in order to profit from price differentials existing between the markets. In the 1980s a form of speculation called risk arbitrage arose, in which speculators tried to identify companies targeted for takeover and buy blocks of their stock, to be resold at a profit when the takeover was announced and the company's stock rose in value. See also insider trading; security.