Podcast: Arbitrage is like being Batman

Kristia van Heerden Latest, The Fat Wallet

The more questions I ask about investing, the more questions I have. While talking derivatives last week, Simon mentioned arbitrage. It’s a term smart folks like to use at investment conferences. When they do, I nod and hope people can’t really smell fear.

Doofus and Smarty Pants recording #fatwallet this morning. I’ll let you decide who the doofus is.

A photo posted by Kristia Van Heerden (@k_r_isis) on

In this episode I find out arbitrage is a lot like being Batman – all you really need is a ton of money and dead parents. I’m only half kidding. When a share is traded on more than one market, price differences creep in. Arbitrage is when you buy the cheaper share on one market and sell it at the higher price on the other market. I thought this sounded like a pretty awful way to earn a living, but it turns out computers can do it for you while you do things that are fun. Like be Batman.

This is a show about questions. Send yours to ask@justonelap.com.

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