When you use the word ARBITRAGE a lot of Nigerians don't fully understand what it means and how it works.

Business pros please come to our rescue.

I'm not sure if this is still practised/allowed in Nigeria. In the late 90's people made loads of money buying WAUA travellers' cheques in Nigeria going to Ghana and converting same to Cedis and then buying dollars in Ghana's black market then back to Nigeria. The gains on this round trip is out of this world.

mmmmmhhhhhhh

In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit at zero cost.

Is it proper to say that FOREX and CFD trading is a form of arbitrage?

Waoh! I only knw of arbitrage in football betting. Which I'm yet to explore. @Endujoy, that is, if u are 100% sure of profit. @denzel2009 explain further.

I found a dictionary definition that says Arbitrage - buying and selling simultaneously e.g CFD's

@edujoy, that definition is incomplete, however, CFD's and FOREX can also be classified under arbitrage, but those are highly volatile and risky ones

ARBITRAGE IS WORKOUTS

Special situations.

It has a Formula propounded by Graham.

Annual Returns={CG-L(100%-C)}/YP

When you understand and apply it to Shares for value investing you can make SUPERRETURNS

ARBITRAGE IS WORKOUTS

Special situations.

It has a Formula propounded by Graham.

Annual Returns={CG-L(100%-C)}/YP

When you understand and apply it to Shares for value investing you can make SUPERRETURNS

monopolist:

ARBITRAGE IS WORKOUTS

Special situations.

It has a Formula propounded by Graham.

Annual Returns={CG-L(100%-C)}/YP

When you understand and apply it to Shares for value investing you can make SUPERRETURNS

Please elaborate, This is getting very interesting.

Arbitrage in its purest form is risk-less profit
***Example being shares that trade on two international markets and due to time delays one can take advantage of small price differentials***

Arbitrage and speculative/hedge trading are two different things
When it comes to established markets individual investors do not have the sophisticated tools to take advantage of Arbitrage.

denzel2009:

I'm not sure if this is still practised/allowed in Nigeria. In the late 90's people made loads of money buying WAUA travellers' cheques in Nigeria going to Ghana and converting same to Cedis and then buying dollars in Ghana's black market then back to Nigeria. The gains on this round trip is out of this world.

This is a form of profit, I would consider it Arbitrage only if it were risk-less

Can any business be risk less?

ARBITRAGE

Follows a TIME TABLE

The 1st risk is that it may take 2 years to complete the process

The 2nd risk is that the sell out may not hold due to Court injunctions by Shareholders

WORKOUT MASTERS or ARBITRAGEURS include[b] billionaire Warren Buffett[/b], Carl Ichan e.t.c

At a time Warren Buffett invested about 40 percent of his Investment Partnership in about 40 Arbitrage positions and he always made stunningly huge profits within time range of 3 months to 2 years.

Successful ARBITRAGE depends on the announcement of sell outs, take overs or liquidation of companies.