Arbitrageurs strategically limit trades to outsmart competition and maximize profits.
Arbitrageurs sometimes choose to limit their trading instead of constantly refinancing to avoid running out of money. This is because sharing their trading ideas can lead to competition in the future. The decision to limit trading depends on how easy it is to find profitable opportunities and how quickly they pay off. When opportunities are neither too slow nor too fast, traders are more likely to limit their trading. Easier-to-find opportunities also lead to more deliberate limits on trading.