The Zero-Risk Money Trick
45sThe promise of a 'risk-free profit' is inherently clickable and challenges common financial wisdom.
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[00:01] know more about Arbitrage than 99% of people so with that let's get straight [Music] it Arbitrage is kind of like a clever money trick where you buy something in one place and you sell it in another for
[00:16] a higher price as a result you make a profit without any risk zero it's kind then selling it in a different market to bag The Profit Arbitrage is kind of like a treasure hunt in the world of
[00:30] financial markets it's all about finding small differences in prices of whether it's stocks or bonds or different Financial assets things that you can invest in and then selling them to make a profit it might be a small profit but
[00:42] tons of money let's go through a few real life examples first one is stock market Arbitrage all right so let's say you notice that a company stock is trading at $50 on the New York Stock Exchange that same stock is trading at
[00:55] $51 on the London Stock Exchange there's a $1 price difference right so you buy you sell it to someone on the London Stock Exchange and you make $1 profit $1 million of those stocks then you make a
[01:10] we've got currency Arbitrage imagine that you find $1 us can be bought for 110 Japanese yen in one Exchange Market and then in another Exchange Market it could be bought for 112 Japanese Yen you
[01:24] Market and then sell them for yen in the second market and make a 2 yen profit once again this at scale can be huge profits and that's essentially what Arbitrage Traders are doing for various Banks and financial institutions last
[01:38] but not least we've got sports betting Arbitrage so in sports different bookmakers are offering different bets or prices on outcomes of games right if you place bets on all possible outcomes on a match with different bookmakers you
[01:52] who wins all right what else is worth knowing about Arbitrage so speed is very important Arbitrage opportunities often this disappear very quickly because take advantage of them there's going to be hundreds of thousands of different
[02:05] opportunities and take advantage of them you might get lucky and do it but then supply and demand is going to make the prices match if you're able to execute Arbitrage properly then it's essentially risk-free because you're buying and
[02:18] selling simultaneously and essentially reducing any risk of loss so Arbitrage actually helps keep prices in different markets the same and as a result it efficient while it sounds straightforward
[02:30] not all the opportunities are quite easy to spot some require a very fough and deep understanding of financial markets Arbitrage is generally legal but some types of Arbitrage might have regulatory complications or restrictions this
[02:45] specific Industries now you know what Arbitrage is what if I asked you do you know what Leverage is if you don't make sure you check out this video since you you smash that like button it tells YouTube that this video is worth other
[02:59] channel grow which allows me to make more of these videos with that make sure you tune in to the next video to learn another Financial term concept or idea in basic English
[03:13] in basic English peace no battery perfect timing peace no battery perfect timing peace