Arbitrage is a financial strategy that involves exploiting price discrepancies for the same asset in different markets to make a profit without assuming any significant risk. This practice is a cornerstone of efficient market theory, highlighting the swift adjustment of prices across markets to eliminate disparities. In this article, we delve into the concept of arbitrage, its types, and its role in fostering market efficiency. Arbitrageurs are individuals or entities that identify and capitalize on price inefficiencies in financial markets. These discrepancies can arise due to variations in supply and demand, information asymmetry, transaction costs, or other factors. Arbitrageurs aim to buy an asset at a lower price in one market and sell it at a higher price in another, pocketing the difference as profit. Types of Arbitrage: Spatial Arbitrage: This type involves exploiting price differences for the same asset in different geographical locations. For instance, if a commodity has a higher price in one country compared to another, an arbitrageur might buy it in the cheaper market and sell it in the more expensive one. Temporal Arbitrage: Temporal arbitrage focuses on taking advantage of