An arbitrage opportunity exists if an investor can make a deal that would give an immediate profit, with zero initial cost, no risk of future loss, and a non-zero probability of future profit. It neither costs anything today nor in any state in the future. It has a positive payoff either today or at a future date (or both).

Traders frequently attempt to exploit the arbitrage opportunity by buying a stock on a foreign exchange where the share price hasn't yet been adjusted for the fluctuating exchange rate. An arbitrage trade is considered to be a relatively low-risk exercise.