Arbitrage: refers to foreign exchange trading activities that take advantage of the differences in exchange rates or interest rates at different times (delivery dates) and different places (foreign exchange markets) to prevent exchange rate risks and obtain arbitrage benefits.

Arbitrage trading can be divided into direct arbitrage and indirect arbitrage.

Direct arbitrage

Arbitrage by using the exchange rate difference of a certain currency between two foreign exchange markets is called direct arbitrage, also called two-point arbitrage or two-place arbitrage.

(2) Indirect arbitrage

Indirect arbitrage, also known as three-point arbitrage or triangular arbitrage, refers to an arbitrage transaction in which arbitrageurs use the cross exchange rate difference of three different currencies in three different foreign exchange markets, and at the same time buy cheap and sell expensive in these three foreign exchange markets to earn exchange rate difference.