Arbitrage involves taking advantage of discrepancies in market prices, but it also takes many different forms. There is risk arbitrage, which involves buying the stocks of companies involved in a merger or acquisition. There is retail arbitrage, which is the buying and selling of physical products like you might see on eBay or Amazon. There is convertible arbitrage which is buying a convertible security and then shorting the underlying stock. And there is statistical arbitrage which works through the use of complex mathematical formulas that trade the markets programmatically to take advantage of even small price discrepancies.