Time Arbitrage

Posted in Finance, Accounting and Economics Terms, Total Reads: 417
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Definition: Time Arbitrage

Arbitrage is the phenomena of taking advantage of price difference in financial markets to make a profit. Whenever there is a price imbalance in 2 different markets then it gives rise to the chances of arbitrage. As with arbitrage this method of making profit is considered to be riskless.


Sometimes an opportunity comes by due to the missing of the mark by a stock and which leads to the stock being sold in the short term time frame without largely affecting the long term strategic prospect of the company. Such a blip in stock value can be the result of the failure of the company to meet the earning target set by the analyst or momentary stumble in the stock prices while trading. It is during this time some investors take the opportunity to gain their chances to outmanoeuvre the market.

 

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