Arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price. This usually takes place on different exchanges or marketplaces. It is also known as a “riskless profit”.
“Arbitrage” trading is simply the trading of securities when the opportunity exists during the trading day to take advantage of differences in value between the markets the trades are made within. Arbitrage trading takes place all day long on most days that the markets are active.
In theory, arbitrage is riskless. It’s illogical for the same asset to trade at different prices, so eventually the two prices must converge. The person who buys at the lower price and sells at the higher one will make money with no risk. The challenge is that everyone is looking for these easy profits, so there may not be many of them out there.
You would have noticed a price difference in NSE and BSE for the same stock.
If price difference is appreaciable, then you can buy on one exchange and sell it on the other exchange, purely on intraday basis.
This is arbitrage. If price difference is good, you could make good profits.