What is Compound Arbitrage?
Compound arbitrage is an investment strategy that involves the utilization of at least four different markets. The underlying purpose for employing a variety of markets is to conduct trades in a manner that provides a higher rate of return on the same or similar financial instruments across the various markets. Essentially, compound arbitrage takes the operating strategy found with simple arbitrage and makes use of the approach across a wider range of markets. There are several advantages for the investor when it comes to making use of a compound arbitrage strategy. First, it is possible to maximize the chances for earning returns on a security that is performing very well. By acquiring those securities on more than one market, it is often possible to ride an upward trend as the wave hits each of the succeeding markets. As the trend begins to level out, it is a simple matter to sell off the shares in a given market while retaining control of the shares traded in a different market unti
” Compound arbitrage is an investment strategy that involves the utilization of at least four different markets. The underlying purpose for employing a variety of markets is to conduct trades in a manner that provides a higher rate of return on the same or similar financial instruments across the various markets. Essentially, compound arbitrage takes the operating strategy found with simple arbitrage and makes use of the approach across a wider range of markets. . There are several advantages for the investor when it comes to making use of a compound arbitrage strategy.
