Arbitrageur

If arbitrage is like...what you do....then you’re an arbitrageur. (Side Note: Doesn’t this sound like a cool new term for being a spy? "No, she doesn’t work at the bank anymore. She’s an international arbitrageur on a mission to fight for justice while snorkeling in a country you’ve never heard of called X.")

If you’re an arbitrageur, you make it a thing to look for price differentials in two different markets. These are places where the market is out of balance. Same stocks, same commodities. Two different prices. (One tonne in England is selling at $60, and the same tonne in Nairobi is selling at $60.02.)

You buy one stock in one place and sell the other simultaneously in another...and make a profit. Some say that this was easier to do before communications became effective (i.e., technology), because back in the day there weren’t computers to catch these mistakes. That said, arbitrage still exists on a different level, which is why arbitrage trading programs are um...helpful. They’re fast enough to catch these mistakes before the price differentials are caught.

There used to be a darker skeezier side to this now-small industry; see the prison cell of Ivan Boesky for details...HIS version of arbitrage was to gather inside information regarding mergers and acquisitions and basically short the buyer as he went long the seller. And that ended up being a hugely lucrative (if illegal) system that became the most famous arbitrageur case in modern Wall Street history.