Imagine a candy bar that costs $1 at Store A but $1.10 at Store B. 🍫

You can buy 100 bars from Store A for $100 and sell them at Store B for $110. Instant $10 profit! 🤑

Arbitrage = buying for a lower price in one market and then instantly selling at a higher price in another market ➡️💰

Arbitrage can be done in the stock world too!

Let's say Apple stock is $150 on the New York Stock Exchange (NYSE) but is $152 on the London Stock Exchange (LSE). 🍎

An investor could buy 100 shares on the NYSE for $15,000 and immediately sell Apple in the LSE for $15,200.

Boom, $200 profit! 💵

Hedge funds do this all day, every day, scraping up small profits that add up to BIG profits over time! 🏦

The best part? It's a quick and low-risk way to make money. 🤑

But hold on! Here’s why only hedge funds and pro investors can do this ➡️

1️⃣ Computing Power

Hedge funds use powerful expensive computers to make these trades in milliseconds! ⏱️

2️⃣ Timing

The computers have to operate in milliseconds because prices change super fast! ⚡

If you’re late by even 1 millisecond, the chances to profit disappear 👀

3️⃣ Significant Funds

Since the difference in price is minimal, with our Apple example only having a $2 difference. . .

You need to buy thousands of shares for the risk to be worth it! 👀 Hedge funds typically arbitrage anywhere from $100 million to $100 billion at a time 💸

Because arbitrages are usually short-term plays, you’re unlikely to be able to copy these moves by copy-trading hedge funds, since they’ve most likely entered & exited their positions by the time their public reports come out.

Artbitraging is not for the average investor, but it’s important to understand what hedge funds are up to!🏝️