Arbitrage Trading

Arbitrage trading involves exploiting price differences of the same asset in different markets for risk-free profits.

Key Points:

• Common in futures vs. spot market, options pricing, and cross-exchange arbitrage.
• Requires fast execution and large capital.

Example: A trader buys Nifty Futures at 21,800 on NSE and sells it at 21,820 on SGX (Singapore Exchange), making a 20-point arbitrage profit.