For example, an investor might rent a residential property under a long-term lease and then list it on short-term rental platforms at a higher rate to earn a profit.
The example of risk arbitrage we saw above demonstrates takeover and merger arbitrage, and it is probably the most common type of arbitrage. It typically involves locating an undervalued company that has been targeted by another company for a takeover bid.
Let's say you bet $100 on the Cubsmoneyline at +110 against the Cardinals at FanDuel. You'd profit $110 with a Chicago win. At the same time, BetMGM lists the Cubs at -105 and the Cardinals -105. You can bet $105 on the Cardinals to win $100, and guarantee either a break-even or $5 profit.
The process is as follows: Using an odds comparison site such as Oddschecker, find a sporting event which offers two outcomes. Find the highest odds available for each outcome from two different bookmakers. Calculate whether the odds represent an arbitrage betting opportunity.