4 ms·
You could do that. It's not really zero risk though because the coin could drop in value. Usually (real) traders who find arbs on (real) exchanges will submit s
by rgoldade 9y ago
You could do that. It's not really zero risk though because the coin could drop in value. Usually (real) traders who find arbs on (real) exchanges will submit simultaneous bid/ask orders without holding the actual product. They can clear the trades later.
- rgoldade 9y agoOf course.. if you could take a short position against the coin, you could hedge and eliminate your risk.
- JumpCrisscross 9y ago> if you could take a short position against the coin How can you short it? CBOE futures only exist for one exchange. What if that exchange’s price stays steady while others crash? Or that exchange goes up while others crash, thereby triggering margin calls while you lose money? Sure, the situation will eventually rectify itself. In the short term, however, you’re broke.
- rgoldade 9y agoMargin accounts? It seems like many crypto exchanges offer this. Isn't the example you described the perfect arb situation where you would short sell on the expensive exchange and buy on the cheap exchange?