Knowing how to arbitrage cost imbalances in the global economy will help as well.
Here we look at the concept of arbitrage, how market makers utilize ‘true arbitrage,’ and, finally, how retail investors can take advantage of arbitrage opportunities.
In the economic sector instantaneous global information pushes the trading and financial systems towards perfect information, reducing the opportunities for arbitrage .
Any value difference should generate arbitrage profits and the elimination of the divergence.
Only those who spot the change, see arbitrage opportunities, and shift capital to take advantage of information market failure.
Second, there may be opportunities for tax arbitrage .
As an investment activity it is driven by tax-levered debt, tax minimisation, capital gains arbitrage and profiteering.
When prices deviate from this theoretical benchmark, money moves quickly to arbitrage away any differences.
This arrangement gives institutional traders the opportunity to arbitrage the fund, but provides stale information to the general public.
This enables telecoms to arbitrage international cost differences to boost profitability.