Arbitrage trading is a technique used to take advantage of differences in price in substantially identical assets across different markets or in different types of instruments. The process involves the simultaneous buying and selling of an asset in order to profit from a discrepancy in the price in two different markets or exchanges. The existence of arbitrage trading opportunities helps keep financial markets efficient and liquid, and ensures that large price deviations do not exist for extended periods.
In this guide, we explain how it works and list the best brokers for arbitrage trading if you’re a retail investor interested in forex and other global financial markets.
Top-Rated Brokers For Arbitrage Trading
We checked these brokers cater to retail investors looking to deploy arbitrage-style strategies with key components like fast execution and low fees:
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- Demo account
- Regulator: ASIC, CySEC, FSCA, BVI FSC
- Platforms: Web Platform, MT4, MT5, TradingCentral
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- Demo account
- Regulator: FCA, ASIC, CySEC, SCA, SCB, CMA-Kenya
- Platforms: Web Platform, MT4, TradingView
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- Demo account
- Regulator: FSC-Belize, FSC-Mauritius
- Min. deposit: $10
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- Demo account
- Regulator: ASIC, FSCA, FSA, FSC, CMA-UAE
- Min. deposit: $20
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- Demo account
- Instruments: Stocks, Options, ETFs, ADRs, OTCs
- Regulator: SEC, FINRA, MAS, SFC, ASIC, CIRO, JFSA, SC
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- Demo account
- Instruments: Cryptos, Futures
- Regulator: SCA, FSC, FMA
Learn how we test brokers and why you can trust our ratings.
Here is a short overview of each broker's pros and cons
- Markets.com 4.4/5 Established in 2008, Markets.com is a long-standing, multi-regulated broker with oversight from the CySEC and FSCA. It offers unique features to track hedge fund moves and insider trades, while providing stock signals to alert traders to market opportunities. Its choice of accounts (Classic to Professional) caters to all levels of active trader. 72.3% of retail accounts lose money.
- Capital.com 4.3/5 Established in 2016, Capital.com initially focused on CFDs across forex, indices, stocks, commodities, and crypto, aimed squarely at active traders. Over the years it has added more instruments, obtained multiple regulatory licenses, improved its charting tools, and introduced an 1X account that lets you trade without using margin (borrowed funds), now catering to a diverse mix of traders worldwide.
- Axiory 3.6/5 Founded in 2011, Axiory is a regulated forex and CFD broker offering tight spreads and highly leveraged trading on industry-leading platforms: MT4, MT5 and cTrader. The broker has won multiple global awards and is regulated by the FSC in Belize and the FSC in Mauritius.
- PU Prime 4.5/5 PU Prime is a forex and CFD broker offering direct market access on forex, commodities, stocks, bonds, indices, and ETFs. With four account types (Cent, Standard, Prime, ECN) and multiple platforms, from MetaTrader to its own PU Prime app, it’s built for active traders at every level.
- Moomoo 3.2/5 Moomoo is an SEC-regulated app-based investment platform that offers a straightforward and affordable way to invest in Chinese, Hong Kong, Singaporean, Australian and US stocks, ETFs and other assets. Margin trading is available and the brand offers a zero-deposit account as well as several bonuses.
- Bybit 3.1/5 Bybit is an established crypto exchange aimed at online traders. Clients can speculate on leading tokens like Bitcoin, access crypto staking and loans, or trade NFTs using the firm's digital marketplace. Millions of users have signed up with the firm since it launched in 2018.
Community Sentiment
See how users rate these brokers based on the average customer ratings submitted on DayTrading.com, plus ratings from Trustpilot, the Apple App Store and Google Play.
| Broker | Our Users' Rating | Trustpilot Score | Trustpilot Reviews | iOS App Rating | Android App Rating |
|---|---|---|---|---|---|
| Markets.com | 1260 | ||||
| Capital.com | 15246 | ||||
| Axiory | - | 69 | |||
| PU Prime | 1878 | ||||
| Moomoo | 736 | ||||
| Bybit | - | 7725 |
Markets.com
Markets.com is best suited to retail investors who trade frequently but don’t want to calculate commissions, thanks to its spread-only pricing (EUR/USD around 1.3 pips). It especially appeals to short-term traders who value fast execution, flexible asset choice spanning 2,200+ instruments and proprietary tools like hedge fund confidence indices and insider trade alerts.
Christian Harris, Reviewer
Markets.com quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Stocks, Commodities, Indices, Crypto, ETFs, Bonds
- Regulator
- ASIC, CySEC, FSCA, BVI FSC
- Platforms
- Web Platform, MT4, MT5, TradingCentral
- Minimum Deposit
- $200
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, AUD, ZAR, SEK, NOK, DKK, CHF, PLN, CZK
Pros
- Markets.com’s Hedge Fund Confidence and Insider Trading tools pulls SEC filings into the dashboard within 24 hours of disclosure, helping to spot fund moves and C-suite buys before most retail newsfeeds updated.
- Within the 2,200+ CFDs, Markets.com offers thematic baskets like the Warren Buffett Blend and Cannabis Blend, which behaved like ready-made mini-ETFs during testing, saving the work of balancing weights manually.
- Switching between the proprietary web platform (great for alerts and quick analysis) and MT5 (strong for algorithmic EAs) was smooth in our tests; positions synced across desktop, web, and mobile without gaps or re-quotes.
Cons
- The proprietary web platform felt a bit basic once we pushed into advanced charting with fewer drawing/indicator options than full TradingView or MetaTrader.
- During sign-up, we hit unclear account type explanations and got stuck in an email verification loop that locked us out for an hour - way less streamlined than other brokers we’ve tested.
- While CySEC and FSCA oversight is solid, the SVGFSA and BVIFSC entities offers 1:500 leverage under a light-touch framework, meaning protections like compensation schemes and strict conduct rules lag behind the strictest regulatory standards.
Capital.com
Capital.com is a great match for day traders with its thousands of CFDs, SmartFeed providing tailored market updates, and TradingView charts for advanced technical indicators paired with Capital.com’s fast and reliable order execution.
Christian Harris, Reviewer
Capital.com quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs on Forex, Stocks, Indices, Commodities, ETFs, Crypto
- Regulator
- FCA, ASIC, CySEC, SCA, SCB, CMA-Kenya
- Platforms
- Web Platform, MT4, TradingView
- Minimum Deposit
- $20
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, AUD, SEK, NOK, DKK, CHF, HKD, PLN, CZK, AED, HUF, MXN
Pros
- Traders who prefer robust charting can connect their Capital.com account directly to TradingView. This lets you use TradingView’s advanced tools and community ideas alongside Capital.com’s execution, blending a popular charting platform with a regulated broker’s access.
- Capital.com’s SmartFeed curates news and market updates tailored to your watchlist and trading style. This proactive feature helps day traders stay on top of relevant events without feeling overwhelmed by generic market noise.
- The Capital.com app performed excellently during testing, with smooth orders, trade management and alerts, while it sits among the highest rated trading apps on the App Store for iOS users.
Cons
- Capital.com offers primarily a standard CFD account and a professional account (subject eligibility) with higher leverage, but it lacks ECN/raw spread accounts or tiered pricing, which can limit trading flexibility for high-volume scalpers.
- While Capital.com supports MT4, it lacks MT5 integration, limiting access to advanced trading features, including additional timeframes, indicators, and order types.
- The broker’s research resources focus on educational content and in-house analysis but do not currently include third-party tools such as Trading Central, Autochartist, sentiment indicators, and professional-level screeners that some top competitors offer.
Axiory
Axiory remains a top choice for beginners with its low deposit, unlimited demo account and high-quality education. Experienced day traders will also appreciate the advanced capabilities of the cTrader platform, although the range of 350+ instruments may be too restricting.
William Berg, Reviewer
Axiory quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Indices, Commodities, ETFs, Stocks
- Regulator
- FSC-Belize, FSC-Mauritius
- Platforms
- MyAxiory App, MT4, MT5, cTrader, AutoChartist, Quantower
- Minimum Deposit
- $10
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR
Pros
- Axiory offers free, multiple demo accounts in any of the 3 platforms with no expiry, so clients can continuously test their day trading strategies risk-free
- Upgraded infrastructure now gives execution speeds of 29 milliseconds, while Axiory guarantees zero or positive slippage on 70% of trades
- A good range of accounts are available with just a $10 minimum deposit required and Islamic swap-free versions
Cons
- Only USD and EUR are accepted as account base currencies, so many clients may have to pay conversion fees
- Axiory doesn’t hold any top-tier licenses in Europe, the US or the Asia-Pacific region
- The broker’s range of 350+ instruments is much smaller than the hundreds offered by most leading firms
PU Prime
PU Prime is a great fit for experienced, high-volume traders with its ECN account offering tight spreads from 0.0 pips and low commissions from $1/side. The addition of an easy-to-use copy trading app, alongside the stacked Trading Academy with progression levels, also makes PU Prime a strong option for aspiring traders.
Tobias Robinson, Reviewer
PU Prime quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Stocks, Indices, Commodities, Metals, Crypto, Bonds, ETFs, Pre-IPOs, Synthetic Indices (region-dependent)
- Regulator
- ASIC, FSCA, FSA, FSC, CMA-UAE
- Platforms
- PU Prime App, PU Web Trader, PU Social, MT4, MT5, AutoChartist
- Minimum Deposit
- $20
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, CAD, AUD, NZD, JPY, HKD, SGD
Pros
- Prime and ECN pricing can be very competitive for active traders, and in our tests spreads tightened notably in liquid sessions to hit ~0.0 pips.
- The platform lineup is strong, with the PU Prime Web Trader and app especially smooth to use with a modern design, easy-to-configure order tickets and responsive charts for fast entries and exits.
- PU Prime has added a dynamic leverage system for high-impact economic news releases and weekend gaps, helping to protect accounts from extreme market volatility.
Cons
- The in-house market updates are useful for a quick read, but they’re generally high-level and don’t go deep enough for serious strategy building or advanced analysis.
- The ECN account’s $10,000 minimum deposit puts the best pricing out of reach for some active retail traders who may end up paying more for spreads and commissions on Prime, Standard or Cent accounts.
- While PU Prime holds licenses in Australia (ASIC) and South Africa (FSCA), its offshore entities have been flagged by UK, North American, and European regulators for providing services without local authorization.
Moomoo
Moomoo remains an excellent choice for new and intermediate stock traders who want to build a diverse investment portfolio. What really stands out is the broker's user-friendly app and the low trading fees.
Jemma Grist, Reviewer
Moomoo quick facts
- Demo Account
- ✔Yes
- Instruments
- Stocks, Options, ETFs, ADRs, OTCs
- Regulator
- SEC, FINRA, MAS, SFC, ASIC, CIRO, JFSA, SC
- Platforms
- Desktop Platform, Mobile App
- Minimum Deposit
- $0
- Minimum Trade
- $0
- Account Currencies
- USD, CAD, AUD, JPY, MYR, HKD, SGD, CNY
Pros
- There are reduced options contract fees from $0.65 to $0
- The Moomoo AI assistant, found in the desktop software and app, provides genuinely useful market insights to inform active traders
- The broker offers access to extended pre-market trading hours
Cons
- The account range is narrow compared to other brokerages in its class with no managed portfolios or robo-advisor solutions
- Moomoo has faced multiple regulatory penalties in recent years, including fines and orders in 2026 that stopped it temporarily accepting some Japanese and Chinese clients
- There is no negative balance protection, which is a common safety feature at top-tier-regulated brokers
Bybit
Bybit is a good choice for active traders who want a fast and straightforward way to buy crypto tokens and trade crypto derivatives.
William Berg, Reviewer
Bybit quick facts
- Demo Account
- ✔Yes
- Instruments
- Cryptos, Futures
- Regulator
- SCA, FSC, FMA
- Platforms
- MT4, TradingView
- Minimum Deposit
- $0
- Minimum Trade
- 0.001 Lots
- Account Currencies
- EUR, GBP, TRY, RUB
Pros
- ByBit upgraded its Futures Bots in 2026, providing access to perpetual contracts for popular TradeFi assets, including TSLAUSDT, GOOGLUSDT, and tokenized gold
- IPO Express launched making it among first crypto exchanges to provide tokenized IPO access
- Retail clients can easily swap between supported coins within accounts, take profit and stop loss, strategy alerts, and adjust orders
Cons
- While Bybit has strengthened its regulatory credentials, it's still faced warnings and actions in jurisdictions like Hong Kong and Canada
- Its finance markets like TradFi are not available in the EEA due to regional regulatory challenges
- Bybit had a serious security breach in 2025 with around $1.5 billion in Ethereum stolen, though the exchange did recoup customers
Arbitrage Trading Example
Let’s say an exchange-traded product (ETF) is trading for $50 per share and its intrinsic price based on its individual components should be $50.10.
An arbitrageur will come into the picture and buy the ETF while simultaneously selling the individual stock components in the appropriate proportions – that is, sized to the weighting of the individual components and monetary amount of the long position in the ETF – until the price discrepancy is eliminated.
Arbitrage in Day Trading
Below are examples of arbitrage that day traders can realistically employ:
Merger Arbitrage
Because of modern-day technology, it is difficult for traders to take advantage of traditional statistical price arbitrage opportunities in the market. Proprietary trading firms and hedge funds often exploit these opportunities within a matter of seconds (sometimes even a fraction of a second) with high-powered computing capacity, leaving little opportunity for those with less sophisticated technology.
There are, however, different type of arbitrage in the market outside of basic statistical arbitrage. For example, there is a type of strategy known as “merger arbitrage” (sometimes called “takeover arbitrage”) in the market where traders attempt to arbitrage out risk in the markets.
Example
When company A seeks to buy company B, the former will usually pay the latter a premium – i.e., an amount above fair market value – in order to take control of the firm. If company B is trading at $100 per share before the takeover announcement and company A publicly announces that it will be buying its target for $125 per share, the market will never re-price company B at this new $125 takeover price.
This is due to the fact that it’s possible company A will retract its offer, company B may turn it down (or demand a higher price or engage in other negotiations), regulators may either block the deal or ask one or both companies to meet specific conditions that one or both sides may not be willing to meet, or some other third-party intervention could alter the prospective transaction.
Therefore, company B may price somewhat lower than the $125 takeover price, such as $120 to reflect an 80% chance of the deal closing – that is, high but not certain.
At the same time, because company A is paying beyond the market’s believed fair price for company B (and due to other factors, such as integration risk), company A’s price may fall from its current point in the market.
If company A was trading at $100 per share, it may fall to something lower, such as $96. Given the transaction has some chance of not occurring, the market would price company A’s stock at closer to $95 if there was a 100% probability of the deal going through to completion.
If a merger arbitrage trader believed that the transaction would follow through to completion – or at least has higher odds relative to those priced in – he or she would go long the target (company B trading at $120 per share) and short-sell the acquirer (company A trading at $95 per share).
Relative Value Arbitrage
If two stocks historically have high levels of correlation, it would be expected that, unless their business models fundamentally change, this correlation would continue to hold up.
Example
Goldman Sachs (GS) and Morgan Stanley (MS) have a correlation of 80% since both began trading simultaneously in May 1999. This correlation has run as high as 96% and as low as 50%
If one observed that the current correlation was in the 50%-60% range and was due to Goldman Sachs rising more than its competitor, one could take advantage of this potential opportunity by short-selling Goldman and buying Morgan Stanley. Eventually, the trading pattern between the two could be expected to revert to the mean, after which one would close the position once the correlation normalized.
Liquidation Arbitrage
Liquidation arbitrage is a type of trading by which one invests in stocks trading below their book value. The basic metric to evaluate such cases is the price-to-book ratio (P/B). If P/B < 1 – put another way, the sum of its parts is greater than the whole – then a company is trading below its book value and would be theoretically more valuable than its current stock price if the company were liquidated.
Banks commonly trade at under their book value in environments of low interest rates, flat or inverted yield curves, and high amounts of regulation.
This strategy, like others, is not foolproof. A catalyst generally needs to emerge to push the market in the right direction rather than rudimentary measures of a particular security being cheap.
This is a common strategy under the umbrella of “value investing”.
Net-net Arbitrage
This is a form of liquidation arbitrage but involves a more conservative version of the strategy. Net-net is defined as net working capital (current assets minus current liabilities) minus the long-term portion of debt – i.e., debt with maturity of greater than one year in the future (debt coming due within one year is part of current liabilities).
Some define it as net working capital minus all liabilities. When this value is greater than the market value of equity, this would suggest that there is a high chance that, should the company be liquidated, shareholders would receive more than the stock’s current value. Or the company may be poorly managed and better unlock or realize its value under new stewardship.
Why do these opportunities occasionally exist?
For one, net-net stocks tend to be smaller capitalized stocks and more easily escape Wall Street’s attention.
As companies, they may be “in limbo” and neither value-creating nor susceptible to insolvency risk in the short- or intermediate-term, leading the share price to lag what might be implicated by its balance sheet for extended periods of time.
Moreover, investors might believe that the value of its assets may be overrepresented on its balance sheet (e.g., forthcoming markdown of inventory value) and thus may truly not be an opportunity with a high margin of safety.
More on Arbitrage Trading
- Crypto Arbitrage – How to do arbitrage trading with cryptocurrencies.