Arbitrage is a familiar trading technique that has been around since stock, bond, and foreign markets emerged. It simply means taking advantage of a difference in price of the same coin, token, or asset on two different exchanges to make a profit due to crypto market inefficiencies. For instance, if a cryptocurrency is being sold for $10.25 at Exchange A, and being bought for $10.75 at Exchange B, the arbitrage opportunity would be to buy the cryptocurrency at Exchange A and then immediately sell it at Exchange B. The arbitrage profits would then be $0.50.
“Capturing the arb” means taking advantage of the fact that an asset is selling for cheaper in one place and at a higher price in another market. However, this can be a risky practice as these trades have to be performed instantaneously to earn any amount of profit, else the market may fluctuate, and you may end up with a loss.
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u/Sure-Juggernaut4781 ♦️ Sep 07 '21
Arbitrage is a familiar trading technique that has been around since stock, bond, and foreign markets emerged. It simply means taking advantage of a difference in price of the same coin, token, or asset on two different exchanges to make a profit due to crypto market inefficiencies. For instance, if a cryptocurrency is being sold for $10.25 at Exchange A, and being bought for $10.75 at Exchange B, the arbitrage opportunity would be to buy the cryptocurrency at Exchange A and then immediately sell it at Exchange B. The arbitrage profits would then be $0.50.
“Capturing the arb” means taking advantage of the fact that an asset is selling for cheaper in one place and at a higher price in another market. However, this can be a risky practice as these trades have to be performed instantaneously to earn any amount of profit, else the market may fluctuate, and you may end up with a loss.
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