Arbitrage is buying and selling an asset of the same class in different markets simultaneously, with the purpose of profiting on the asset’s price discrepancies. As for statistical arbitrage on cryptocurrency markets, a coin is bought on an exchange A and sold simultaneously on an exchange B at a higher price (this is called an open flat position on the market). Once the quotes on both exchanges have become equal, or the exchange A’s quote has become higher than that on the exchange B, the trader liquidates their flat position by making the opposite trades on the two marketplaces to make profit without any risk.