Triangular arbitrage

Ever noticed prices for the same item differ across stores? Why?

Imagine going to three different stores to buy the same brand of sneakers. You find Store A selling them for 100, Store B for 95, and Store C for $105. You buy from Store B and sell to Store C for a profit.

You spot a chance to buy cheap from one place and sell for more at another. This is called triangular arbitrage, exploiting price differences across markets for the same asset.

Example

Buy sneakers for 95 at Store B, then sell them for 105 at Store C, making a $10 profit.

Remember this

Spotting and acting on price differences across markets can lead to profit.

Text adapted from Wikipedia, licensed under CC BY-SA 4.0.

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Educational content, not financial advice.

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