Two sides at 2.10 each look like a tidy five percent. Then the first leg fills and the second one reprices. Live arbitrage risk lives in that gap between legs, and this lesson shows the math of how it plays out. You work through three states: both legs accepted, only one accepted, or neither. A suspension can wipe out a displayed price, and a reopened quote can already reflect a score. You see how a repriced second leg turns a small win on one side into a bigger loss on the other, so the position stops being an arb at all. Knowing when to pass is a skill, and it protects your bankroll more than any scanner setting does.
Learning objectives
- Explain this technique and its assumptions in the context of real market rules.
- Reproduce the worked calculation or scenario.
- Identify false positives and when a proposed position should be rejected.
