"Terminates a query when an overflow or divide-by-zero error occurs during query execution.Note that this setting can have significant effect on query performance. It is quite possible for a query to run very quickly in SQL Management Studio but very slowly when run from code (e.g. ADO.Net). A possible explanation is that ADO.Net runs with ARITHABORT set to OFF whereas SQL Management Studio runs with it ON.
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If SET ARITHABORT is ON, these error conditions cause the query or batch to terminate. If the errors occur in a transaction, the transaction is rolled back. If SET ARITHABORT is OFF and one of these errors occurs, a warning message is displayed, and NULL is assigned to the result of the arithmetic operation."
If a query is running very slowly from code it is worth checking if ARITHABORT should be set to on.