Term
Arbitrage
A trade in two related assets, one of which seems cheaper than the other. Buying one and selling the other can make the result less dependent on the overall movement of the market.
Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street, William Poundstone
Explained in
- Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street, William Poundstone
- When Genius Failed: The Rise and Fall of Long-Term Capital Management, Roger Lowenstein
Making money on small price gaps between similar assets: you buy the cheap one, sell the expensive one and wait for the gap to close.