Although making money is not exactly easy for most of us, there are still a few tips and tricks when it comes to it. Of course, this means that you have to learn this and that on the side, but the point is, it may be worth the effort. Great things don’t just fall in your lap, but if you’re interested in achieving them, arbitrage may be your starting point.
In simple terms, arbitrage involves the purchase and sale of an asset in order to profit from price fluctuations – basically, it’s a way to gain money out of market inefficiencies. However, stock pricings change in less than seconds, so it’s impossible for traders to make calculations and find arbitrage opportunities. This is when software comes in – right now, you can use computers to achieve your goal. They have the capacity to perform algorithmic trading with minimal effort from your part. All you have to do is set the limits within which you want your trades to be executed – when these limits are reached, the computer performs the trades on your behalf.
There are, however, some arbitrage opportunities which you can make money from easily. For instance, there are foreign currencies that essentially work as a triangle – if you trade currency X for Y, and then Y for Z, you can make profit from the difference between X and Z. Another example would be that of liquidation; a company that is approaching it can become the source of great differences, given the fact that it has higher stock value during the process.
It’s clear that arbitrage can become profitable when it comes to any financial asset, if you know how and when to take advantage of it. Luckily, if you don’t manage to do it by yourself, you can always turn to computers.