Arbitrage

Arbitrage (套利tàolì) describes the practice of buying an item in one market and selling it almost simultaneously in another market at a higher price to take advantage of price discrepancies.

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Alternative Meanings:
  • Arbitrage (套利)

    Arbitrage (套利 tào lì) refers to the purchase and sale behavior that can make a profit (利润 lì rùn) from a difference in the asset's price between markets.

    Part 1: Breakdown of Words 

    “套” (tào) as in "trap" (圈套 quān tào) or "quilt" (被套 bèi tào).

    “利” (lì) as in "beneficial"(有利 yǒu lì) or "interest" (利益lì yì). 

    Part 2: Examples:

    1. Interest arbitrage transaction (套利交易 tào lì jiāo yì).
    2. Arbitrage strategy (套利策略 tào lì cè lüè).

     

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