[Verse 1]
Picture two identical apples in the market today
One costs five dollars, one costs three to pay
Smart buyers rush to grab the cheaper one
Until the prices match when trading's done
[Chorus]
No arbitrage, no free lunch here
Same assets, same price, crystal clear
Law of One Price keeps markets in line
No risk-free profits by design
One price, one market, that's the way
Arbitrage opportunities fade away
[Verse 2]
If gold in New York trades at different rates
Than gold in London through the trading gates
Traders buy low and sell high cross-border
Till prices align in perfect order
[Chorus]
No arbitrage, no free lunch here
Same assets, same price, crystal clear
Law of One Price keeps markets in line
No risk-free profits by design
One price, one market, that's the way
Arbitrage opportunities fade away
[Bridge]
When prices differ for identical things
Quick traders act and balance brings
Supply and demand will find their way
To one fair price at end of day
[Verse 3]
This principle builds our pricing foundation
Modern finance across every nation
Identical cash flows, identical worth
Same price everywhere across the earth
[Chorus]
No arbitrage, no free lunch here
Same assets, same price, crystal clear
Law of One Price keeps markets in line
No risk-free profits by design
One price, one market, that's the way
Arbitrage opportunities fade away
[Outro]
Remember the rule when markets you see
Identical assets priced equally
The foundation stone of finance theory
No arbitrage keeps prices free