Arbitrage in real estate involves buying and selling properties, or financial instruments linked to real estate, in different markets to profit from price differences. This strategy can also include leveraging financial instruments like REITs or mortgage-backed securities to exploit discrepancies in pricing.
A derivative is a financial instrument whose value is based on the price of another underlying asset. Derivatives are commonly used for hedging, speculation, and arbitrage purposes to mitigate risk or enhance potential returns.
