ar·​bi·​trage | \ ˈär-bə-ˌträzh How to pronounce arbitrage (audio) \

Definition of arbitrage

 (Entry 1 of 2)

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


arbitraged; arbitraging

Definition of arbitrage (Entry 2 of 2)

intransitive verb

: to engage in arbitrage

Examples of arbitrage in a Sentence

Recent Examples on the Web: Noun Today’s Chart Exporting nickel from Russia to China is profitable again, after falling prices on the London Metal Exchange reopened the arbitrage window., 21 Apr. 2022 That seems a bit strange, if your baseline expectation is that investors are going to seek arbitrage opportunities. Tim Fernholz, Quartz, 22 Apr. 2022 Analysts say that created a parallel black market and arbitrage opportunities that sent the value of Sri Lanka’s sovereign debt into free fall. New York Times, 3 Apr. 2022 The fund is making bets on the direction of bitcoin, ether and other cryptocurrency prices, while also searching for arbitrage between currencies and investing in blockchain technology. Gregory Zuckerman, WSJ, 9 Mar. 2022 Our ramshackle system of interstate tax arbitrage had provided incentives for teachers, bureaucrats, health workers, firefighters, and police officers to exacerbate both the exodus and, perversely, the burden on the taxpayers left behind. Nick Paumgarten, The New Yorker, 21 Mar. 2022 Investors were promised up to 7% interest per week, and that their funds would be used for bitcoin arbitrage. Allison Morrow, CNN, 16 Feb. 2022 Through a series of complex moves best characterized as asset arbitrage, Daryl Morey landed Harden in a blockbuster trade. Rahat Huq, Chron, 7 Mar. 2022 Brian Leggett and Bryson Holdings LLC brought the case against Wells Fargo after losing some $1.2 million on a merger arbitrage investment strategy executed by a broker there in 2015 and 2016. Ben Eisen, WSJ, 3 Feb. 2022 Recent Examples on the Web: Verb CEOs may arbitrage the best and cheapest job seekers across the country—and potentially globally. Jack Kelly, Forbes, 28 June 2021 Now, before this comes off as a tribute to arbitrage and saving pennies on the margins for billionaire owners, a reminder that what makes the Dodgers so imposing and the Giants potentially so is smarts stacked atop resources. Gabe Lacques, USA TODAY, 30 Apr. 2021 One advantage of ETFs is that shares can be readily created and redeemed to arbitrage away any discount or premium, which could greatly broaden their appeal. Telis Demos, WSJ, 12 Apr. 2021 Localized cancer, headline risk—call it what you will, these episodes create wrinkles in the investment time-space continuum that long-term investors can use to arbitrage between perception and reality. Adam Seessel, Fortune, 19 Nov. 2019 Were this only a matter of firms arbitraging better rates and swapping back to dollars, the Americans would be dominated by banks. Washington Post, 3 Apr. 2019 One explanation is that foreigners have direct access to the market, and so large price gaps can be arbitraged away quickly. Nathaniel Taplin, WSJ, 18 Sep. 2018 One risk is that, as local investors clamour to buy them, CDRs will trade at a huge premium to their foreign counterparts. Because of capital controls, there is no channel for arbitraging between onshore and offshore markets. The Economist, 10 May 2018 As Ars Technica points out, arbitraging cheap power is a widespread business tactic in industries as diverse as aluminum production and marijuana cultivation. David Z. Morris, Fortune, 17 Mar. 2018 See More

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'arbitrage.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of arbitrage


1875, in the meaning defined at sense 1


1857, in the meaning defined above

History and Etymology for arbitrage


borrowed from French, literally, "decision-making, judgment," going back to Old French, "judgment pronounced by an arbiter," from arbitrer "to pass judgment" (borrowed from Latin arbitrārī "to consider, judge, decide," verbal derivative of arbitr-, arbiter "onlooker, arbiter") + -age -age

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The first known use of arbitrage was in 1857

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Last Updated

11 May 2022

Cite this Entry

“Arbitrage.” Dictionary, Merriam-Webster, Accessed 20 May. 2022.

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More Definitions for arbitrage


ar·​bi·​trage | \ ˈär-bə-ˌträzh How to pronounce arbitrage (audio) \

Legal Definition of arbitrage

1 : the purchase of a security, commodity, or foreign currency in one market for the purpose of immediately selling it at a higher price in another market
2 : the purchase of the stock of a takeover target especially for the purpose of selling it to the raider for a profit

History and Etymology for arbitrage

French, literally, arbitration, decision-making

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