Risk Arbitrage In economics, arbitrage is the practice of taking advantage of a state of imbalance between two ( or possibly more ) markets: a combination of matching deals are hurt that exploit the imbalance, the betterment seeing the exception between the market prices. A element who engages in arbitrage is called an arbitrageur. For example, if you can buy items at one price at a factory outlet and sell them for a too many price on an internet auction website such as eBay, you can occurrence the imbalance between those two markets for those items. The expression " arbitrage ", however, is usually applied solo to trading in money and investment instruments ( such as stocks, bonds, and other securities ), not to goods, and the discongruity in prices is usually referred to as " the spread ", so arbitrage is often momentous as " playing the spread " in the money market. Arbitrage has the result of causing prices in unusual markets to converge. As a re