4 ms·
What do you mean on a large scale? in cytpo eschanges, large orders only lead you to pay too expensive (or sell too cheap)
by fedecaccia 8y ago
What 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.