Arbitrage

Arbitrage is the practice of exploiting price differences between two or more markets to make a profit. It involves buying an asset or product at a lower price in one market and selling it at a higher price in another, capitalizing on the price discrepancy. This can occur in various contexts, such as financial markets with stocks and currencies or in retail, like luxury goods, where regional pricing and tax differences create opportunities. While arbitrage helps bring prices closer together and adds efficiency to markets, in sectors like luxury retail, it can challenge brands’ pricing strategies and profit margins.