1. Risk free investment
The arbitrage is virtually a risk- free product, completely hedged at all times and hardly impacted by the volatility in the markets. The risk is virtually zero as the arbitrageur enters into two or more transactions of identical or equivalent instruments in two or more markets at the same time.

2. Higher returns
The arbitrage product is a better alternative to the investors who have invested funds in bank fixed deposits, bonds and liquid/ debt funds. In arbitrage products, one should expect a taxable return of 15-18% per annum (10-12% tax free) as compared to fixed-income schemes taxable return of 7-8% per annum.

3. Greater flexibility
These products not only provide better returns but also greater flexibility in respect of lock in period. If returns dip the investor can take his funds back within 15-30 days, whereas in Fixed deposits and bonds, lock in period is 5-7 years. In liquid/ bond funds charges exit loads, which make them unattractive in the event investor choose to exit.

4. Security
Dealing in arbitrage products is same as shares. It is like a share broking account where at the end of the day, the investor gets the contract note and bill from the broker mentioning trades done on his/ her behalf. The investor on a daily basis can track that how his fund is utilized.