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Arbitrage Quote by John Gutfreund

“Proprietary stock-index arbitrage is but one aspect of program trading. Arbitrage will take place whenever there is an imbalance created in one or more markets that are similar.” quote by John Gutfreund
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“Proprietary stock-index arbitrage is but one aspect of program trading. Arbitrage will take place whenever there is an imbalance created in one or more markets that are similar.”

John Gutfreund

About This Quote

Source Book: Market Wizards, 1990

Programmed trading exploits price imbalances across similar markets for profit.

In simple terms: Arbitrage uses market price differences.

Key Takeaway

Identify and trade price gaps.

Themes

finance trading technology

Mood

analytical objective

Type

educational informational

When to use this quote

  • stock trading
  • hedge fund strategies
  • algorithmic execution

Key Concepts

arbitrage program trading market efficiency

Questions to Reflect On

  • What markets show the biggest imbalances?
  • How can technology improve arbitrage?
A Different Perspective

Requires precise data and speed.

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