Source : Webster's Revised Unabridged Dictionary (1913)

Arbitrage \Ar"bi*trage\, n. [F., fr. arbiter to give judgment,
   L. arbitrari.]
   1. Judgment by an arbiter; authoritative determination.
      [Archaic]

   2. (Com) A traffic in bills of exchange (see Arbitration of
      Exchange); also, a traffic in stocks which bear differing
      values at the same time in different markets.

Source : WordNet®

arbitrage
     n : a kind of hedged investment meant to capture slight
         differences in price; when there is a difference in the
         price of something on two different markets the
         arbitrageur simultaneously buys at the lower price and
         sells at the higher price

arbitrage
     v : practice arbitrage, as in the stock market