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It's only an efficient market because of arbitrage. If the price of copper futures in Europe suddenly soars, the price of copper futures in America doesn't magi
by logicchains 7y ago
It's only an efficient market because of arbitrage. If the price of copper futures in Europe suddenly soars, the price of copper futures in America doesn't magically, spontaneously rise to meet it; somebody has to do the work. You don't need to be better at modelling, you just need to be faster, or have a way of getting information earlier.
- bdkoepke 7y agoNot necessarily true; if you got a mark on copper futures in Europe then you would expect the best American copper futures bid/ask to change fast. Updating bid/ask doesn't require trading.
- infinite8s 7y agoIt requires active participants in the market.