Forex: What is currency arbitrage, and is it profitable?
Currency markets, just as financial markets, have some imperfections — the same currency pair can be sold at different prices at the same time. Some traders capitalise on these deviations to make money during a process called currency arbitrage. Read further to understand the concept in detail
Traders usually make money, or look forward to making money, by buying stocks at low prices and selling them at high. The same principle is followed in currency trading as well. There is, however, one strategy – currency arbitrage -- where traders buy and sell at the same time at different prices to make money from the variation in prices at which two transactions are carried out.