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the term they meant is texas lottery "riskless arbitrage". Buying a whole pizza, then standing in front of the pizza shop shelling the slices for a net profit
by fsckboy 2y ago
the term they meant is texas lottery "riskless arbitrage".
Buying a whole pizza, then standing in front of the pizza shop shelling the slices for a net profit is arbitrage. but it's risky because you might not be able to sell enough of them (before they get cold, say) to earn back your investment.
when you talk about an arbitrage that is guaranteed profit, that is a riskless arbitrage.
- sincerely 2y agoReally? Doesn’t that describe every kind of store where you don’t create the product yourself as an arbitrage? You’re just buying items from a supplier and reselling to make a profit
- felizuno 2y agoFor sure. Buying wholesale and selling retail is one of the most common/accessible windows of arbitrage you can find.
- fsckboy 2y agoprobably best to understand the way people use the term as a risk spectrum, from riskless arbitrage where there is no window for losing money, through say a real estate deal where you find a seller at a good price, and you find a buyer at the market price, and you insert yourself in the middle (a perfect houseflip) even though you don't have the capital to suffer the loss if things get screwed up, to an antique shop that buys on speculation and sells to reliable clients. A pawn shop is arbitrage too. generally people mean by arbitrage that you enter into a transaction having both a seller and a buyer in mind, or you have two liquid markets with different prices.
- solatic 2y agoBuying wholesale and selling retail isn't arbitrage. Wholesale pricing is cheaper precisely because it is a bulk price. There is an overhead to selling individual units. A retail operator adds value by introducing individual unit liquidity, with the price premium of the individual unit offsetting the risks involved in paying the fixed costs of retail (rent etc.), not selling all the inventory, and having enough left over for a profit.
- baobabKoodaa 2y agoThis is not that
- rightbyte 2y agoHow can lottery tickets be riskless? I mean you need to draw winning tickets too. Even if the EV is over 1 you can end up under 1 in practice?