Strike Money

  Arbitrage is one of the oldest and most respected trading strategies, where traders profit from temporary price differences in the same asset across different markets. Arbitrage became famous because it focuses on pricing inefficiencies rather than predicting whether the market will rise or fall, making it a preferred strategy for hedge funds, investment banks, proprietary trading firms, and high-frequency traders. The concept dates back centuries, when merchants earned profits by buying goods in one city and selling them at higher prices in another. Today, technology and algorithms execute arbitrage trades within milliseconds, helping keep financial markets efficient by quickly removing price gaps. Although arbitrage is often considered a lower-risk strategy, it still requires fast execution, sufficient capital, and low transaction costs to be profitable. As Nobel Prize-winning economist Milton Friedman famously said, “There is no such thing as a free lunch,” reminding traders t...

  Scalping is a style of trading where traders open and close their position within seconds or minutes and profit from small price moves. Scalping aims to capture small and repeatable profits many times in a single trading session. The idea of scalping originated in the 1980s and 1990s on the trading floors of Chicago and New York where scalpers or locals used to buy at the bid and sell at the ask hundreds of times to earn the small spread. In the early 2000s, with the rise of electronic trading, scalping shifted to screens, and today it forms the backbone of a large part of market activity. With the support of discount brokers and high speed internet, scalping has now become accessible for retail traders as well. According to exchange and market-structure research, high-frequency and scalping-style strategies are estimated to account for over 50-60% of daily trading volume in major equity markets globally. In India, the rise of zero-brokerage discount apps, faster order execution,...

  Options arbitrage is popular among professional traders and institutions because it aims to capture temporary pricing gaps with low market-direction risk. The approach became more widely used after modern option-pricing models appeared in the early 1970s. The Black-Scholes model, introduced in 1973, played a major role in showing traders how an option’s theoretical value could be calculated. These opportunities usually don’t last long. Some disappear within seconds. Still, they offer a useful look at how options are priced and how markets correct themselves. Learning about options arbitrage can also help traders understand option relationships, fair value, volatility, and market efficiency. Pro Tip: Use Strike Money for real-time market charts and technical analysis. What Is Options Arbitrage? Options arbitrage is a strategy that tries to profit from pricing differences between related option contracts or between an option and its underlying stock or index. It’s often described...