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What is Arbitrage Trading ?

This article was posted on Jun 29, 2008

“Arbitrage” trading is simply the trading of securities when the opportunity exists during the trading day to take advantage of differences in value between the markets the trades are made within. Arbitrage trading takes place all day long on most days that the markets are active.

Arbritrage is legally allowed. In fact arbitrage is responsible for a large part of the daily volumes on the NSE & BSE exchanges.

What mainly takes place in India is called Market Arbitrage
Market Arbitrage involves purchasing and selling the same security at the same time in different markets (BSE & NSE) to take advantage of a price difference between the two separate markets. A market arbitrageur would short sell the higher priced stock and buy the lower priced one. The profit is the spread between the two assets.

Here is a simple example:

Suppose you own 600 shares of RPL. One trading day you notice that RPL is trading at 150 on the BSE and 145 on the NSE. You sell your 600 shares on the BSE at 150 and simultaneously buy back the 600 shares on the NSE at 145.

You profit in this case is 600*5.00 = 3000.00 less brokerages if any.

82 Responses

Comment pages: 123456Show all

  1. harsh arora Says:
    January 20th, 2010
    Posted at: 1:55 pm

    Can i do arbitrage trading in nse bse market (intraday).....
    buying in nse and selling the same script in bse in few mins.

  2. Rajdipsinh Says:
    January 23rd, 2010
    Posted at: 12:06 am

    I know about arbitrage. And i want know which broker allows arbitrage in gujarat with small brokrage.

  3. Ravinder Says:
    January 23rd, 2010
    Posted at: 7:00 pm

    Hi Pankaj I Can Give U Job In Arbitrage Pls contact me
    my email [email protected]

  4. sid Says:
    February 4th, 2010
    Posted at: 6:25 pm

    i 've not completed the ncfm but i have the experience in capital and derratives market.is there any oppertunities for me type of applicant.
    is there any way to trade like a arbitrage at my home. is there any type of terminal which provides to trader/broker to trade as arbitrage.plz send the brief to clear my concept .if there is any possibility plz zzzzzzzzz send on my email: [email protected]
    waiting for quick response

  5. sanjay kumar delhi Says:
    February 5th, 2010
    Posted at: 12:47 am

    1 want to do system arbitrage. i have more than 1 year exprience

  6. bimlendu kumar jha Says:
    February 27th, 2010
    Posted at: 12:21 pm

    i have cleared NCFM IN capital &derivatives market but i hve no experiance now i want to do arbitrage.my finanancial background is not strong.any SOLN. PLEASE guide me.can i do an [email protected]

  7. Vinod Prajapati Says:
    March 4th, 2010
    Posted at: 6:09 pm

    I need arbitrage job in kolkata
    I have 3 year exp in equity market
    pls inform some broking house doing arbitrage business

  8. sagar Says:
    March 5th, 2010
    Posted at: 7:17 pm

    i want all detils regarding arbitrage along with course fees, & want to know future opportunities.. pls mail me..

  9. ravinder Says:
    March 20th, 2010
    Posted at: 12:26 pm

    I have two year experience in stock market,i want to know about arbitrage trading places.

  10. bhaskar Says:
    March 20th, 2010
    Posted at: 6:21 pm

    i have pased capital ,derivative market so i want do job arbitrage in hyderabad plaese guide me

  11. amit rana (9250602126) Says:
    March 24th, 2010
    Posted at: 9:34 pm

    i have two year experience in arbitrage and i want to job for arbitrage in delhi.

  12. ANAND PARMAR Says:
    March 25th, 2010
    Posted at: 10:54 am

    i m a operator in arbitrag

  13. PIYUSH Says:
    March 28th, 2010
    Posted at: 2:48 pm


  14. Vijay Singh Says:
    April 14th, 2010
    Posted at: 4:26 pm

    i want to learn arbitrage trading, where do I contact for that in Kolkata.

    April 20th, 2010
    Posted at: 7:39 pm

    I have four years experience in stock market so i want to do arbitrading.pl.guide me.pl.send me your contect no.My contect no. is 9212874967.I leave in delhi.

  16. sunil kumar Says:
    April 27th, 2010
    Posted at: 4:14 pm

    I need arbitrage job in delhi
    I have 2 year exp in equity market
    pls inform some broking house doing arbitrage business

    my email id- [email protected]

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