# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Arbitrage Trading Program

Written By
Paul Tracy
Updated January 16, 2021

What is an Arbitrage Trading Program?

An arbitrage trading program is a software program that attempts to take advantage of very small price differences between securities, such as index futures and the underlying stocks represented. The program automatically scans for opportunities and places appropriate trades.

How Does an Arbitrage Trading Program Work?

Most arbitrage opportunities are notoriously short-lived, so the only way to take advantage is by using an arbitrage trading program. With an arbitrage trading program, a trader can give the computer instructions to execute arbitrage trades automatically by buying and selling stocks and futures based on specified guidelines. The program can then scan the market for opportunities at a much faster pace than a human and place orders without any hesitation.

Why Does an Arbitrage Trading Program Matter?

Arbitrage trading programs provide traders an opportunity to profit from short-lived arbitrage scenarios that they would otherwise likely miss.

Ask an Expert about Arbitrage Trading Program
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Arbitrage Trading Program.
Be the first to ask a question

If you have a question about Arbitrage Trading Program, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Arbitrage Trading Program, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Arbitrage Trading Program

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms