A market arbitrage takes place when a security is bought in one market and simultaneously sold in another, which allows the investor to benefit from the impact of the temporary difference in value. In the share market, market participants tend to take advantage of arbitrage opportunities by buying a share on an international trade in which the stock value of the equity was not even adjusted for the fluctuating trading price level. Thus, the stock price on the foreign trading is discounted compared to the price on the domestic trading, allowing the trader to profit from the difference. This may seem like a complex trade to the untrained eye. However, arbitrage trading is fairly straightforward and is deemed low-risk.

When a security is bought in a market and also sold in another, there will be a temporary difference in the value. This is an arbitrage opportunity, and the trader can benefit from it.

In the world of Forex trading, arbitrage is a strategy that is employed to take advantage of discrepancies in prices between two different markets. As the price spreads widen, arbitrage opportunities become more attractive.

Arbitrage in Forex trading refers to the practice of exploiting price differences of a currency pair across different markets to gain a profit. Traders engage in arbitrage by taking advantage of discrepancies in exchange rates or variations in pricing between various brokers or financial institutions. This strategy capitalizes on the fact that currency pairs are often priced differently in different markets or at different times.

Forex arbitrage can be categorized into three main types: spatial arbitrage, temporal arbitrage, and statistical arbitrage. Spatial arbitrage involves taking advantage of price differences in the same currency pair across different brokers or platforms. Temporal arbitrage exploits price variations over time, capitalizing on delays in information dissemination. Statistical arbitrage relies on mathematical models and statistical analysis to identify and exploit market inefficiencies.

However, it's essential to note that arbitrage opportunities in Forex markets are typically short-lived and challenging to execute due to the efficiency of the market and advancements in technology. Traders employing arbitrage strategies need to act swiftly and utilize sophisticated tools to capitalize on these fleeting opportunities.