Get started

Arbitrage

Look Mom, it’s ArbitrageThis is a thought of the day kinda article. In an old episode of Seinfeld, when referring to being offered a free lift, Jerry says something like “Ah the lift, like the lure of the siren’s song. Never what is seems to be but who among us can resist.” Fast forward to trading crypto and we all see those arbitrage opps right? That quick trade, if you bought on one exchange and sold on another, could make $50 in bitcoin or even $100. Like the lure of the siren’s song? Like you, I have sat there watching it too. And at first you think ‘well this is easy’! It never is. That’s not to say arbs do not exist, but chances are the risk-free ones are pounced upon before you can blink and the risk-on ones, well they have risk. Unfortunately, there are several things that get in the way of a good-looking arb: 1. Commissions: obvious but often overlooked. Coin trades are charged a percentage, unlike the fixed dollar amounts in futures . That $50 trade, when you take into account % in and % out, is already breakeven. In futures to make $50 in an arb is gift because comms are far lower, but that’s another topic. 2. Then there is funding. If you are going to arb you need 2+ funded accounts. Even though interest rates are low, money isn’t free. That is also the opportunity cost of money, and that is… a cost. Sure, you could wait for a position to move from one account to the next, but then you have time risk. That’s not an arb trade. 3. Margin fees. If you are doing this on margin, then there are fees there too. Kraken for example chart 1-2bp per 4hours. Exchanges are not businesses not charities. There are little programs you can buy that spot arbs. Then again there are prop firms who will bank roll traders with an automated edge in the market. If you had a little arb algo, working perfectly, would you bother selling it? Nah, go to a prop shop and get funded. My time in prop firms has taught me if they are in something then the fat trades get thinner and thinner. They will also be faster and more efficient. As Gekko said in Wall Street “If you don't have enough, you can't p**s in the tall weeds with the big dogs.” That’s not a negative statement at all. It’s just one about knowing the market you trade. You don’t compete with the same strategy. You step back and trade your own. We all have our place in the market. If you are still finding your way, don't stress. We'll get there. A good example of how deep pockets approach arbs is in the book Flash Boys.
Editors' picks
COINBASE:BTCUSD
by TheTradarien
33
Troy breakout pattern incoming. (TROY) ($TROY)Troy has just breaken its high. Massive upside incoming in this pattern. DOGE money needs somewhere to go which is a legitimate project. DeFi play TROY is a Smart Hybrid Asset Management System offering yield farming, fixed savings, a liquidity aggregator (for Binance, Huobi, OKex, Uniswap, Curve, Balancer), provider of arbitrage opportunities, etc. What is Troy Trade? Troy Trade is a global prime broker specialized in crypto trading and asset management. It provides crypto brokerage services for institutional clients and professional traders with products such as spot & margin trading, derivatives, data, custody, lending, and staking in one account. Master-level Trading Platform: One account with a single interface enables access to the aggregated liquidity of crypto exchanges. Some key functions include smart order routing, flexible account management, settlement service, and automatic risk control. Data Analytics: Empower customer’s decision making with a data matrix framework. Data categories include blockchain data, trading data, market data, social data, and media data optimized by AI and quantitative models. Brokerage Service: Competitive fee rate and order execution speed. Real-time fund transfer and settlement service. Provide margin trading and OTC services with advanced convenience. Full-stack Quantitative Solutions: Infrastructure powered by co-location service to better the performance of high-frequency trading algorithms. Offer exposure to quantitative solutions with straight-through processing, precise tick historical data, and strategy assessment systems. *What is the TROY Token? Functions as the medium of exchange in this organic network Provides workload reward of Relayer network to encourage timely and accurate updating, broadcasting, and synchronizing orders Serves as relay medium for the exchange of unconventional token trading pairs in-ring matching Acts as the trading fee unit when users call up the trading and settlement functions Means of access to features in Troy and burnt as gas fees Incentives for brokers and to reward brokers contributing to maintaining a global ecosystem
Long
by CryptocurrencyWorkingGroup
DeFi aggregator Troy lifting off NOW. ($TROY)DeFi play TROY is a Smart Hybrid Asset Management System offering yield farming, fixed savings, a liquidity aggregator (for Binance, Huobi, OKex, Uniswap, Curve, Balancer), provider of arbitrage opportunities, etc. EMA is in a healthy spot with MACD and other important indicators ready to bounce up for the next big jump. TROY softened a little on the last BTC drop but not nearly as much as others like DENT, HOLO, etc., which points to some serious momentum up. This coin hasn't had the massive jump yet that other microcaps have and it's a 10 billion coin circulation not 100 billion like HOLO and others which means a much higher target price . A few sources say whales have been accumulating. Trust the charts, not the "crowd wisdom" on this one and take your positions now... Buying information for a very accessable exchange as well as financial disclaimer in the signature. Good luck.
Long
by CryptocurrencyWorkingGroup
Bitcoin Cash and Carry 2021For years I have been talking about using futures products to LOCK IN the fiat value of Bitcoin and give investors the added bonus of collecting a return based on the arbitrage. We are once again in a big bullish cycle which is driving up the futures premiums to all time highs creating OPPORTUNITY . In the FTX:BTC1231 for instance as of writing there is a 20% arbitrage. In this video I revisit this concept for 2021 and explain how it works. See my written idea posts below for this has played out in bull cycles past.
FTX:BTCUSDEducation
by norok
8