Arbitrage

Arbitrage is the technique of simultaneously buying at a lower price in one market and selling at a higher price in another market to make a profit on the spread between the prices.

Although the price difference may be very small, arbitrageurs, or arbs, typically trade regularly and in huge volume, so they can make sizable profits.

But the strategy, which depends on split-second timing, can also backfire if interest rates, prices, currency exchange rates, or other factors move in ways the arbitrageurs don't anticipate.

The simultaneous purchase of a commodity or derivative in one market and the sale of the same, or similar, commodity or derivative in another market in order to exploit price differentials.

Exploiting market inefficiencies by buying and reselling a commodity for a profit. As it relates to the search market, many thin content sites laced with an Overture feed or AdSense ads buy traffic from the major search engines and hope to send some percent of that traffic clicking out on a higher priced ad. Shopping search engines generally draw most of their traffic through arbitrage. See also: Wolf-Howl: AdSense Arbitrage: Tips, Tricks & Secrets [audio] Jeremy Shoemaker interviews Kris Jones and part 2 Wikipedia: arbitrage