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RE: The math behind cross-exchange arbitrage trading

in #arbitrage7 years ago (edited)

Why are you using arbitrage examples with only a .1% spread??? I can spot endless examples 100 times more than that. You just need to know when and where and be alerted when the conditions exist. Here's a screen-shot I took of Bitcoin with thousands of $$$ spread between bitcoin exchanges (over 10% spread) and over 100 times your .1% examples. The arbitrage spread is much larger than your math suggests and I took this screenshot just 2 days ago. https://ibb.co/jn8Xjb Some people might think this happens once in a blue moon but if you use a market scanner it will scan all the exchanges and give you opportunities​ like this to where you only cherry pick Greater than a 10% or even a 20% spread​.

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The issue with BTC Spreads is transaction time. If you send BTC from one exchange to the other, most require at least a 6 block confirmation as of this morning that time sits at around 9 minutes. A lot of volatility can change in the hour that will take. If the transfer was instant, or you had a fast intermediary currency you may be able to beat the spread, but even a 500 dollar difference in bitcoin is only 2.8%. So you need to be able to beat the fees, and hope that the exchanges don't catch up to each other within an hour. Otherwise you lose out on the fee portion instead of materializing a gain.

I agree with you 100%. I've seen spreads btw 7-12% on a consistently

I've seen spread in xrp/usd pairs across bitfinex vs. kraken in 3-4%. Even if 50% of the gain were to be paid for fees, you'd still gain like 1.5-2%?? However, I can't seem to open an bitfinex account anymore.

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