arbitrage

/ˈɑɹbɪˌtɹɑʒ/

Etymology

An unadapted borrowing from French arbitrage, from arbitrer (“to arbitrate”); see arbitrate.

Why this word is great

ARBITRAGE — [Noun] The simultaneous purchase and sale of an asset in different markets to profit from price discrepancies. From French arbitrage, from arbitrer ("to arbitrate"), ultimately from Latin arbitrari ("to judge, decide"). Unlike "speculation" (which gambles on uncertainty) or "arbitration" (which negotiates conflict), arbitrage is the frictionless extraction of value from imbalance. It is the hum of servers in a Tokyo data center buying Bitcoin microseconds before it rises in New York, the scent of diesel on a cargo ship ferrying discounted wheat between ports, the weight of gold bars shuffled between vaults to exploit a tenth of a cent—the silent machinery of capitalism correcting itself, one invisible transaction at a time.

noun

A market activity in which a security, commodity, currency or other tradable item is bought in one market and sold simultaneously in another, in order to profit from price differences between the markets.“But in recent years, for reasons we shall develop later, the field of "arbitrages and workouts" became riskier and less profitable.”
Arbitration.

verb

To employ arbitrage“He has arbitraged by purchasing in one market and simultaneously selling the same or similar merchandise in another market.”
To engage in arbitrage in, between, or among“Indeed, as banks become more adept at internal risk classifications, their incentives to arbitrage economic and regulatory capital can only increase”