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well to be fair arbitrage in traditional markets only really works at massive scale. Its also part of the invisible hand that brings equilibrium to markets. Un
by mdb333 8y ago
well to be fair arbitrage in traditional markets only really works at massive scale.
Its also part of the invisible hand that brings equilibrium to markets. Unfortunately its not really accessible to the average investor.
- fedecaccia 8y agoWhat do you mean on a large scale? in cytpo eschanges, large orders only lead you to pay too expensive (or sell too cheap)
- rramdin 8y agoBuilding a sustainable arbitrage business requires scale. Margins are thin and should always be getting thinner, so to remain viable, you have to pursue ever more exotic arbitrage opportunities. Arbitrage opportunities encourage a speed race, and the way to win that race is to use ever-increasing resources to elbow out competition and discourage newcomers.
- mdb333 8y agoUsually a currency arbitrage opportunity provides a fraction of a percent in gains, like .1% max. So, you need massive amount of capital to actually make a reasonable profit. You would think why risk huge amount of money for small profit, but because the markets are established the risk is nil. As traders act on the open opportunities markets become more efficient, eg the spread shrinks, and the opportunity quickly dissapears. A variable transaction cost works against you.
- hbcondo714 8y agoWell at least the ccxt library[1] the author uses makes crypto trading accessible to the average developer along with his code snippets https://github.com/ccxt/ccxt https://github.com/ccxt/ccxt