Why is it called the No-Arbitrage Theorem if it’s really “arbitrage exists but only briefly”? Is it just because all opportunities revert to equilibrium so fast that there’s no ultimate arbitrage, or is there a deeper meaning?

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    $\begingroup$ Theory is about models = approximations of reality. In reality, arbitrage strategies may exist but only briefly. In most theoretical models, arbitrage never exists. The absence of arbitrage is necessary (but not sufficient) for an equilibrium to exist. $\endgroup$
    – Kevin
    May 17 at 13:59
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    $\begingroup$ I don't see how this is off-topic or why the question was closed... $\endgroup$ May 17 at 18:35
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    $\begingroup$ Then you should vote to reopen $\endgroup$
    – Bob Jansen
    May 18 at 17:38
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    $\begingroup$ In the continuous time framework, there is indeed no arbitrage. However, in the context of trading, continuous time is a (useful) fiction. $\endgroup$ May 18 at 18:00