Arbitrage

Arbitrage : A technique employed to take advantage of differences in price.

For example:- XYZ stock can be bought in London for $80 a share and sold in New York at $80.25, an 'arbitrageur' may purchase XYZ stock here and sell the same amt. in New York at the same time, making a profit of $0.25 a share, minus expenses.

Stock Exchange

"Arbitrage" may also include the purchase of rights to subscribe to a security, or the purchase of a convertible security; and the sale at or about the same time of the security obtainable through exercise of the rights or of the security obtainable through conversion.