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The word arbitrage sounds very fancy, but its actually a very simple idea. Its really just taking advantage of differences in price on essentially the same thing to make risk-free profit. So lets just think about a little bit. Lets say in one part of town theres some type of a market. Lets say its a market for apples. And lets say in that market, apples sell for-- just make up some price. Lets say that apples in that market, sell for $1 an apple, $1 per apple. And lets say in another part of town, you have another market. Another markets literally a fruit market. And in that other part of town, apples sell for $1.50 an apple. And were going to assume that these apples are completely identical apples. How could you take advantage in this price difference on these identical things to make a risk-free profit? Well ideally, you would want to sell apples in the more expensive market where you could get $1.50 per apple. And you would want to buy apples in the less expensive mark
