how do arbitrageurs mitigate risk 
arbitrageurs face the risk that the expected price convergence between the two assets won t come about or will take longer than expected potentially leading to losses there s also execution risk where delays or failures in executing trades can erode profit margins in addition arbitrageurs face the liquidity risk of not quickly buying or selling assets at the expected prices because of thin trading volumes to mitigate these perils arbitrageurs often spread their investments across different arbitrage opportunities to avoid heavy losses in any area they also use sophisticated risk management tools and techniques including real time monitoring systems and stop loss orders to limit potential losses many arbitrageurs engage in hedging strategies to offset potential losses from market movements 1