What is arbitrage?

When an entity taking advantage of two or more markets of a price difference goes for simultaneous purchase and sale of a financial instrument on different markets. This is called the Arbitrage. The trader involved in arbitrage makes profit from the difference of prices at different markets. For example: The exchange rate in London is…

Documentary Collection system in international trade explained

Documentary Collection or bill collection refers to the collection of financial and/or commercial documents. The documentary collection is one of the conventional methods of payment in international trade whereby the seller forwards financial and/or commercial documents to the buyer through his bankers against cash payment or acceptance of a bill of exchange. Unlike a bill…