Usually arbitrage is considered an action in a risk-free transaction. It rarely is risk-free in practice.

The “no-brainer” arbs are wonderful when you are among the first to find them, but great ones are rare.

A great and freely available arb situation: Have a method of taking advantage of an inevitable feature of human nature, that of not acting when they should.

Example: Typically, people resist taking correct action when there is excessive market volatility. Those who can mine that excess volatility, in effect, arb away risk premium from the market, along with excess profits.

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