Not to be confused with Arbitration. The term arbitraje triangular forex arbitrage mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies.
Arbitrage” is a French word and denotes a decision by an arbitrator or arbitration tribunal. If the market prices do not allow for profitable arbitrage, the prices are said to constitute an arbitrage equilibrium, or arbitrage-free market. An arbitrage equilibrium is a precondition for a general economic equilibrium. This refers to the method of valuing a coupon-bearing financial instrument by discounting its future cash flows by multiple discount rates.