Arbitrage
Arbitrage involves coordinated purchases and sales intended to capture a price discrepancy in the same asset or economically equivalent exposures. A theoretical arbitrage locks in a profit without market risk, but practical attempts can face execution delays, transaction costs, funding constraints, and settlement risk.
Hypothetically, an asset can be bought for $100 and simultaneously sold elsewhere for $101. If both trades execute, the gross difference is $1 per unit before costs.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure