Arbitrage Trading Problem

Posted in Finance, Accounting and Economics Terms, Total Reads: 171
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Definition: Arbitrage Trading Problem

An arbitrage trading problem is a computer generated and executed program which is used for trading stocks and commodities when they are of a very high volume by traders. This enables high volumes of transactions to happen using softwares and programs, thereby delivering solutions at a fast pace.


The ATP is executed by automated computer systems and that follow a set of rules and algorithms. These programs are highly accurate and avoid all sorts of errors which may happen during a human interacting with a computer and hence arrive at the perfect price for trading thus generating maximum profit overall.


For example, an ATP can be used to trade stock or commodities of shareholders who trade them in a very large numbers in order to gain the perfect quote for the stock.

 

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