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Arbitrage basics | Finance & Capital Markets | Khan Academy

March 21, 2011 2:51 142

Arbitrage The strategy known as arbitrage lets traders lock in gains by simultaneously purchasing and selling identical security, commodity, or currency, across two different markets. The strategy known as arbitrage lets traders lock in gains by simultaneously purchasing and selling identical securities or currency across different markets.Learn more Basics. Created by Sal Khan.

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Finance and capital markets on Khan Academy: Options allow investors and speculators to hedge downside (or upside). It allows them to trade on a belief that prices will change a lot–just not clear about direction. It allows them to benefit in any market (with leverage) if they speculate correctly. This tutorial walks through option basics and even goes into some fairly sophisticated option mechanics.

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