Normally arbitrage trading based upon price difference between two different securities markets is highly risky due to the simultaneous holding of both long and short positions.

Question

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Arbitrage trading based on price differences between two different securities markets typically involves buying and selling the same or closely related securities simultaneously in different markets to exploit price discrepancies. This strategy aims to profit from the price differences while minimizing risk, as the simultaneous holding of both long and short positions in similar assets can hedge against market movements.

Normally Arbitrage Trading Based Upon Price Difference Between Two Different