arbitrage Meaning, Definition & Usage

  1. noun a kind of hedged investment meant to capture slight differences in price; when there is a difference in the price of something on two different markets the arbitrageur simultaneously buys at the lower price and sells at the higher price
  2. verb practice arbitrage, as in the stock market

WordNet

Ar"bi*trage noun
Etymology
F., fr. arbiter to give judgment, L. arbitrari.
Definitions
  1. Judgment by an arbiter; authoritative determination. Archaic
  2. (Com) A traffic in bills of exchange (see Arbitration of Exchange); also, a traffic in stocks which bear differing values at the same time in different markets.

Webster 1913