What is arbitrage?
Spotting the same question priced two different ways and taking the free gap.
If one market says 55% and another says 62% for the same event, someone can back yes on the cheap one and no on the expensive one and profit either way. Doing that closes the gap.
Arbitrageurs sound like villains but they're janitors: they keep prices honest across the whole ecosystem.
| Market | Chance |
|---|---|
| Market A | 55% |
| Market B | 62% |
| The gap | 7% of free money |