Introduction to Crypto Arbitrage (Part 2) || 10% payout to tron-fan-club.

Hello friends. Trust you're good,welcome to my blog once again. I will love to continue my lesson on arbitrage,I hope you've learnt from the previous post. In my previous post, I was able to define arbitrage and the types we have,I also went further to discuss the factors we should consider before venturing into it. Today we will be discussing the type of arbitrage we have so that we can maximize it use.

Types of crypto arbitrage strategies

• Cross-exchange arbitrage

Cross exchange Arbitrage is the traditional arbitrage trading strategy where you pick and asset from one exchange and sell on another because of the price difference you've spotted on both exchanges. It is just as the name implies,it involves the transaction between two exchange using a particular asset, but don't forget to factor in the cost of transfer and transportation fee so you don't end up in loss or no profit at all.

• Spatial arbitrage

Spatial arbitrage is slightly different from cross- exchange. The major difference between these two strategies is that in spatial you capitalize or take advantage of the price of an asset as a result of the effect of the demand and supply on the exchanges which are usually in two different regions or location. The demand or supply of these asset might be largely affected by the people in a particular location where an exchange is widely used than the other .When this is noticed,you can take advantage.

• Triangular arbitrage:

Triangular exchange occurs in a single exchange and not between two or more. You take advantage of price discrepancy among 3 or more asset. The idea here is that you get an asset you want to trade, you trade it to get another and then use the asset to buy the same asset you started with. By the time you run this in a triangular form from the first point until it comes back to the starting point,you'ld have made a substantial profit without transfer fee from one exchange to another.

source

Example
ETH/USDT (Buy) - ETH/ BTC (sell) - BTC/USDT (sell)
Note,we started with BTC and ended up with BTC. That's how triangular arbitrage is done.

• Decentralized arbitrage

This type of arbitrage is peculiar with decentralized exchange. Well this is done by spotting a price difference by observation the price at which an asset is listed on a decentralized exchange then compare with that of a centralized exchange. When you notice a difference is in your favour,you can take advantage of this by using a cross-exchange style but take not that this is between a centralized and a decentralized exchange.

• Statistical arbitrage

Just as the name implies,this type of arbitrage uses mathematical formulas and models in taking advantage of price difference in the market,coupled with the help trading bot which makes the work a bit easier since it involves a lot of calculation and statistics.

Conclusion

Arbitrage trading just like I established in my previous lesson could serve as another source of income for you but you have to understand the rudiments,consider the factors and do your own research before getting started.Am sure you enjoyed the lesson. Thanks for reading through.

Regards:
@lhorgic♥️