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
- Instruments: Stocks, Options, ETFs, ADRs, OTCs
- Regulator: SEC, FINRA, MAS, SFC, ASIC, CIRO, JFSA, SC
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- Demo account
- Regulator: FSC
- Platforms: WebTrader, MT5
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- Demo account
- Instruments: Stocks, ETFs, Options, Pink Sheets, Warrants
- Regulator: SEC, FINRA, CIRO, AFM, SCB
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- Demo account
- Regulator: ASIC, VFSC
- Platforms: MT4, MT5, TradingView, AutoChartist
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.
- 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.
- TabTrade 3.0/5 Established in 2026, TabTrade is a CFD broker based in Saint Lucia. It offers a choice of three accounts (Standard, Edge, VIP) with spread-only and spread plus commission pricing, access to over 1,000 tradeable assets, and leverage up to 1:1000.
- TradeZero 3.8/5 TradeZero is a stock and ETF broker established in the Bahamas in 2015. Though the global entity is regulated offshore, the US subsidiary is overseen by FINRA with SIPC registration. The powerful proprietary trading software makes it a popular choice for active day traders.
- Global Prime 3.8/5 Global Prime is a multi-regulated trading broker offering 150+ markets. Traders can get started with no minimum deposit and trade with leverage that varies depending on your region. The firm also has a high trust score and a good reputation with a license from the ASIC.
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 | ||||
| Moomoo | 736 | ||||
| TabTrade | - | 31 | |||
| TradeZero | 3095 | ||||
| Global Prime | 565 |
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
- 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.
- Markets.com provides commission-free trading on most assets with spreads starting from around 0.6 pips on major forex pairs, making it cost-effective for casual traders.
- 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
- 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.
- Inactivity charges kick in after just 3 months, while variable spreads are wider than top ECN brokers during testing, which may deter day traders and high-frequency traders.
- 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.
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
- 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.
- 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.
- Capital.com offers a unique 1X CFD account option that lets you trade without leverage, though market risk still exists. This is great for beginners or cautious day traders who want exposure without the risks of margin or overnight fees, something few CFD brokers provide. Availability depends on jurisdiction.
Cons
- 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.
- 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.
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 broker offers access to extended pre-market trading hours
- The Moomoo AI assistant, found in the desktop software and app, provides genuinely useful market insights to inform active traders
Cons
- 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
- The account range is narrow compared to other brokerages in its class with no managed portfolios or robo-advisor solutions
- There is no negative balance protection, which is a common safety feature at top-tier-regulated brokers
TabTrade
TabTrade is best suited to retail traders who are comfortable using MT5, want broad CFD access, and can deposit at least $250 for the Edge account to get the raw-spread pricing that makes the broker attractive for frequent, short-term trading.
James Barra, Reviewer
TabTrade quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs on Forex, Stocks, Indices, Commodities, Metals, Crypto, ETFs
- Regulator
- FSC
- Platforms
- WebTrader, MT5
- Minimum Deposit
- $0
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, CAD, AUD, CHF, SGD
Pros
- What impressed us for a new broker was the presence of infrastructure aimed at serious traders, with VPS hosting, FIX API access and Equinix-linked execution, helping active traders deploy fast-paced setups across global markets.
- TabTrade's support team, especially live chat, performed excellently during our second round of tests with 100% of queries answered sufficiently and in under 60 seconds.
- The MT5 platform, available on desktop, web and mobile, gives experienced traders the tools they actually need - one-click dealing, custom indicators, EAs and execution as low as 20ms on some accounts. cTrader and TradingView are also coming soon (not available when we checked the platform area in July and again in September 2026).
Cons
- Although it secured an FSC license in 2026, TabTrade is still based offshore where mandated regulatory safeguards are weaker than in tightly regulated regions, meaning clients don't receive protections like access to an investor compensation scheme.
- Research and education resources need work, with more of a focus on onboarding and account setup than on the kind of market analysis, sentiment data, or strategy development many active traders want.
- Some of the broker’s strongest selling points are gated behind higher tiers, with the VIP account requiring a punchy $25,000 deposit and priority support locked behind the TabTrade+ monthly subscription plan.
TradeZero
TradeZero is best for experienced stock day traders, especially those trading momentum in small-caps or those chasing opportunities in pre- and after-hours sessions. It also suits short sellers needing hard-to-borrow locates and active options traders thanks to its direct routing tools and Level 2 data, though these typically require a paid platform subscription (ZeroPro or ZeroWeb).
James Barra, Reviewer
TradeZero quick facts
- Demo Account
- ✔Yes
- Instruments
- Stocks, ETFs, Options, Pink Sheets, Warrants
- Regulator
- SEC, FINRA, CIRO, AFM, SCB
- Platforms
- TZ1, ZeroPro, ZeroFree, ZeroMobile, TradingView
- Minimum Deposit
- $2,500 (US), $500 (International), $250 (Europe)
- Minimum Trade
- $1
- Account Currencies
- USD
Pros
- TradeZero Europe is bolstering its regional footprint and local trading services by now accepting clients in Belgium, Luxembourg, Norway, and Denmark.
- TradeZero’s short-selling setup is one of the strongest we’ve tested, with pre-borrows, single-use locates, regular locates, and credit back on eligible unused locates - providing access to an inventory many legacy brokers simply don't.
- TradeZero brought out Developer 2026, giving experienced algo traders an API to automate stock and options trades and short locate workflows.
Cons
- Shorting costs can escalate quickly because locate fees are variable, overnight borrowing is market-based (and higher than some brokers), and odd-lot shorts are rounded up to the nearest 100 shares for borrow charging.
- It doesn't use a true 'no commission' model - free trading really applies to non-marketable limit orders of 200+ shares above $1, while marketable orders, OTC names, options, locates, borrow and data still add up fast. It charges a $0.99 flat fee on trades under 200 shares.
- TradeZero is not suitable for traders seeking to build multi-asset portfolios, with no forex, no futures, no funds, no copy trading, and no modern funding options.
Global Prime
Global Prime is suitable for both beginners and seasoned traders with excellent market access, low fees and a range of tools including copy trading.
Tobias Robinson, Reviewer
Global Prime quick facts
- Demo Account
- ✔Yes
- Instruments
- Forex, indices, commodities, cryptocurrencies, shares, bonds
- Regulator
- ASIC, VFSC
- Platforms
- MT4, MT5, TradingView, AutoChartist
- Minimum Deposit
- $0
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, CAD, AUD, SGD
Pros
- Minimum deposit cut to $0, making it more accessible to newer traders
- Low latency with execution speeds from 10ms
- Wide range of deposit options with zero fees
Cons
- Narrow range of account options
- Clients from US and some Canadian provinces like Ontario are not accepted
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.