3 ms·

Crypto arbitrage always seems so tempting, but there's so many gotchas. This site seems to do a good job of weeding out some of the gotchas by focusing on coins

Crypto arbitrage always seems so tempting, but there's so many gotchas. This site seems to do a good job of weeding out some of the gotchas by focusing on coins with high market caps. Usually the "opportunities" in arbitrage that sites like this highlight ignore the fact that the targetted coin on one of the exchanges has abysmally low volume, so you'll be unlikely to be able to buy and sell it in time to take advantage. Other gotchas include: time to transfer the coin between exchanges, fees involved (both in transfer and on the exchanges through buy/sell fees), and exchanges where deposits and withdrawals aren't fully automated (some Chinese exchanges were like this).

j_s 9y ago
Yes, it seems almost shady/misleading that this site doesn't include the Bitcoin/cryptocoin transaction fee and the exchange fees, which are all available publicly. Exchange transaction volume should also be fairly readily accessible, but I'm not sure about that. This could be used to calcualate a probability of success to also take into consideration. Even the various World of Warcraft auction house arbitrage add-ons take this type of stuff into account.
- jespern 9y ago
  They can vary per user between exchanges, depending on how much volume they have, etc.
  - j_s 9y ago
    I do not disagree with your point. Is this a reason to leave it out? It feels like talking to a stock broker / investment advisor who gives all the numbers while leaving out any mention of their cut. In this case the Token Spread site doesn't seem to get anything out of it, unless they somehow tie into exchange affiliate programs wherever they link them up.
esalazar 9y ago
I think you can mitigate a lot of the time and volatility risk by trading on margin, i.e. buy coin on one side and sell on the other. You can still get called on either side but the risk should be smaller. [edit] change bitcoin to coin
runeks 9y ago
> Usually the "opportunities" in arbitrage that sites like this highlight ignore the fact that the targetted coin on one of the exchanges has abysmally low volume, so you'll be unlikely to be able to buy and sell it in time to take advantage. I don't understand. If there's an order in the order book on the sell-side of one exchange that matches one on the buy-side of another exchange, what does volume on either exchange have to do with the ability to take advantage of this situation?
- polskibus 9y ago
  That order can disappear in between. The probability of such event is not zero.
  - runeks 9y ago
    How does exchange volume affect the risk of this occurring?
    - polskibus 9y ago
      The more liquidity there is, the higher the chance that someone will jump in the place of another order that has been withdrawn. Low liquidity and volume means that such chance is lower.
oldstrangers 9y ago
These guys http://tensorbox.com/ http://tensorbox.com/ think they have the answer. Who knows. https://medium.com/tensorbox/the-trading-system-that-maximizes-our-edge-a64e95533959 https://medium.com/tensorbox/the-trading-system-that-maximiz... https://medium.com/tensorbox/stochastic-optimal-control-and-optimization-of-trading-algorithms-4011269a9aea https://medium.com/tensorbox/stochastic-optimal-control-and-...

j_s 9y ago

Yes, it seems almost shady/misleading that this site doesn't include the Bitcoin/cryptocoin transaction fee and the exchange fees, which are all available publicly. Exchange transaction volume should also be fairly readily accessible, but I'm not sure about that. This could be used to calcualate a probability of success to also take into consideration. Even the various World of Warcraft auction house arbitrage add-ons take this type of stuff into account.

jespern 9y ago
They can vary per user between exchanges, depending on how much volume they have, etc.
- j_s 9y ago
  I do not disagree with your point. Is this a reason to leave it out? It feels like talking to a stock broker / investment advisor who gives all the numbers while leaving out any mention of their cut. In this case the Token Spread site doesn't seem to get anything out of it, unless they somehow tie into exchange affiliate programs wherever they link them up.

esalazar 9y ago

I think you can mitigate a lot of the time and volatility risk by trading on margin, i.e. buy coin on one side and sell on the other. You can still get called on either side but the risk should be smaller. [edit] change bitcoin to coin

runeks 9y ago

> Usually the "opportunities" in arbitrage that sites like this highlight ignore the fact that the targetted coin on one of the exchanges has abysmally low volume, so you'll be unlikely to be able to buy and sell it in time to take advantage. I don't understand. If there's an order in the order book on the sell-side of one exchange that matches one on the buy-side of another exchange, what does volume on either exchange have to do with the ability to take advantage of this situation?

polskibus 9y ago
That order can disappear in between. The probability of such event is not zero.
- runeks 9y ago
  How does exchange volume affect the risk of this occurring?
  - polskibus 9y ago
    The more liquidity there is, the higher the chance that someone will jump in the place of another order that has been withdrawn. Low liquidity and volume means that such chance is lower.

oldstrangers 9y ago

These guys http://tensorbox.com/ http://tensorbox.com/ think they have the answer. Who knows. https://medium.com/tensorbox/the-trading-system-that-maximizes-our-edge-a64e95533959 https://medium.com/tensorbox/the-trading-system-that-maximiz... https://medium.com/tensorbox/stochastic-optimal-control-and-optimization-of-trading-algorithms-4011269a9aea https://medium.com/tensorbox/stochastic-optimal-control-and-...