Bitcoin Forum

Does anyone knows Bitcoin Arbitrage?

How does it works?

Please explain

Bitcoin Arbitrage is taking advantage of the price different between 2 exchanges. Say if exchange 1 has buy orders for 100$. And Exchange 2 has sell orders for 99$. Then you would buy from E2 and sell at E1. For every bitcoin you will get that 1$ extra, which is arbitrage.

For discussions regarding arbitrage found this thread : https://bitcointalk.org/index.php?topic=528691.0 .

yup. you should also keep in mind that arbitrage in terms of anything; exchanges, bookies, etc, is only very profitable if a large amount of capital is used as the percent variance is very small. in the most ideal cases you would only be seeing 2-3% profit.

If it is 2-3% profitable, it is 2-3% profitable, the amount of capital used is irrelevant.
If people want to trade their 0.5BTC to make 0.0002BTC, that is still guaranteed profit, there is not need to have too much capital.

Often the amounts that can be traded at the ARB price are also very limited, so again, capital wouldn't help.

youve got a point, profit is profit; i may have used poor wording here, when i said profit i meant something along the lines of a substantial portion of one's income. also I dont use exchanges very often if at all, so I was not aware the trading limits would restrict arbitrage so much

does this work?
i mean you have to consider the fees too. which means you have to pay the fees twice, once where you buy and once where you sell.
is the difference between exchangers that high to cover the fee and give you profit?

besides it takes time to cash out of exchanger, it need to get confirmed by the exchanger and then goes to your other address and get 3 or more confirmations.
what if the price changes in this time?

The problem is, any major exchanges have arbitrage servers, so almost immediately when the price changes the servers sell or buy accordingly and they even out very quickly.   It is very hard to make a profit that way these days.

Also it's worth saying be careful when someone want's BTC to share in profit's of arbitrage.  I know there are a few bots out there and it just is something that is far from a guaranteed profit.

Some do make profit from it and some don't.  I view trying to do a arbitrage as a form of gambling.

my answer is yes, it work, but you need a very good bot, on every exchange, that trade for you, if you do it manually, there are more losses whne moving from one exchange to another, with bot those losses are minimized

And you make a good point about bots.  At this point most are made by bot's.  They are more accurate and quicker then human.   They are also only as good as the parameters behind them.

One thing to mention is multiple bots are running at same time from different people.  So all these bot's running together could it very hard with so many already in the space.   

Arbitrage trading is you buy at low price from one exchange and sell at high price on other exchange
its risky since you don't know if you will able to complete the trade fastly before price change, only professional traders do this

I agree that there appear to be bots trading these things.  If you don't make or buy a bot you chances of arbitrage are slim.  There is a bot that does arbitrage withing an exchange, when there is an inefficiency between 3 currencies, such as dollar, btc and ltc.  But we are talking about really slim margins here.  IMO you are better off using other methods of trading to make money.  And trading isn't easy so be careful!

Just a noob's thought and some advice...

Lets say that exchange A has a buy order for 99Euros and exchange B has Sell orders at 101Euros.
If someone buy from A and then makes it to sell at 101 on B, what would be better to do, having earned the 2 dollars profit?

1) Cash out from exchange B?
2) Exchange the fiat total amount for an altcoin and exchange back to btc?
3) Do nothing and wait for prices to drop below than the previous buy and do afull cycle again?
4) Something else?

can you give me some links on bots that can do this?

and i read a bit more about Bitcoin Arbitrage, and i think my last question was wrong
besides it takes time to cash out of exchanger, it need to get confirmed by the exchanger and then goes to your other address and get 3 or more confirmations.
what if the price changes in this time?
you don't actually cash out, you do the trades and keep both bitcoin and fiat at all exchangers, right?

I suppose there are not many bots, especially for altcoins markets. Just checked live cross-exchange table (http://www.bitcoinfo.ru/trading/ for example) and noticed many altcoin pairs with 5-10-20% arbitrage possibilities.

Some make such trading manually but no signs for the bot activity.

To be honest, as a trader, arbitrage isn't really worth the time or effort for me. But it can be done, and it's basically free money. In fact, I believe there is an open source arb bot on github that uses 4 or 5 exchanges to exploit arb opportunities.

yeah, you could use a platform like this, it is unfineshed http://bitcoinpricelab.com/, but with the right api, your bot can work with all the % variations on every exchange

Its simple, if you see opportunity, you buy altcoin on one exchange at lower
price and sell on other exchange at higher price.

But is really hard to catch profitable arbitrage opportunity, because exchange fees

in short words its buying and selling :)

Calculating the fees is not such a big problem. Problem is the time, that the btc transfer takes. So you'd need many coins on many exchanges to catch all the opportunities.

Bingo. Usually, the arbitrage opportunities are such small margin that the time-risk aspect is too great. It can be done, if you manage risk effectively, but if you can do that, you're probably just better off trading IMO.

If you have the infrastructure to move FIAT (from one country to country), there might be great opportunities. But I'm just a coder, not a banker.

If you had a partner who lived in the same country that the exchange was held.

It would be easier, but it wouldnt be much of a arbtriage since youre relying the same way to deposit and sell quickly from more then 2 exchanges.

Yeah. You trade immediarely and rebalance your funds later. That should work just fine. Would be cool to have such a trader network.

I already  wrote software that should work for such a concept. But maybe I'd have to add new exchanges then.

an arb plan in last year: https://bitcointalk.org/index.php?topic=765074.0  at that time, there is little profits due to the high fee

but both btc-e and lakebtc had decreased the rates, the fee is lower today, I think that plan could be acted now  :)

then you can go ahead and make a bot that work with arbitrage, i'm sure it is possible to earn some low percentage, around 3-5% if you bot is well coded and it is fast enough

But how to rebalance funds?

you can do it through api with your client, or with your online wallet, if let's the your balance is under a certain amount, you just code your bot so it can send more coins

those should be easy stuff for any coders, i'm surprised that you're asking this...

So you transfer USD to btc-e, buy BTC, do the arb trades and end up with USD at LakeBTC. But there is no good (cheap) way to get the USD back to btc-e or your pocket? Or maybe you see other opportunities, than I cannot see...

I already wrote bots to check for such opportinities, like this one:

https://i.imgur.com/OoP0aNo.jpg

, but I don't see any possibility for me at the moment to implement such a trading scheme.

Write me a PM, if you are interested in a collab or have other ideas. I am willing to write some code and share the profits.

you can see the arb profits in this site  http://bitcoin-analytics.com/#xarbitrage

I'm thinking that much of what people do here is not accurately described as arbitrage. Rather, people are buying BTC when it is low on one exchange to sell while it is high on another. Then rinse/repeat when the spreads return to the mean.

You could move the BTC back, when the prices are equal. That might take forever, though...

And you lose money due to fees. Same goes for the fiat transfer. This has to be part of the profit calculation!

Buy on one Exchange for cheaper price and dump on another Exchange to higher price.
This is Arbitrage.... You have to hold funds on both exchnages.

The problem is when funds get imbalanced due to strong bull or bear trends. Then, eventually, you are stuck with most or all funds on one exchange, and need to wait for an opportunity to rebalance. I believe efforts are better spent towards trading. ;)

Even for technical trading, bots can be very useful. braino has a slack channel discussing bots and strategies. Let him or me know, if you want to join.

Another issue is liquidity. Just because BTC has a certain price on an exchange, if the volume is too low then it doesn't help much. 

yes volume is important too. because you can buy btc but if you cant sell it, then arbitrage is down. and a big fees over there. waiting for you. you have to calc them also. arbitrage is really hard stuff. if anybody can do it, im really congrat to them. great job.

It's not a problem...it's a challenge!  :D

You also need a lot of cash to make it interesting.
Some money on every Exchange.... Pfff ...It sound like danger to me.

But I think, you only need minimal amount? At least most opportunities I see, are rather small..

Not quite, it involves a bit of risk and requires good capital.  Moreover,  the most important thing is identifying potential arbitrage opportunities.

Nobody interested to work such a concept out?  :(

more precisely. buying in place quiet and selling in place crowded :D
That's my strategy  ;D

simply buying and selling by exploit difference price in many marketplace.
thats arbitrage.
bitcoin arbitrage = buying and selling bitcoin by exploit difference price in several bitcoin exchangers.

yes I know about it, arbitrage is practice to take advantage of price differences that occur between the two financial markets or exchanger
I've been quite a long time playing this arbitrage method

Do you already have a bot?

I HAVE BEEN PERFORMING TRIANGULAR ARBITRAGE WITHIN AND THE DIFFERENT GLOBAL MARKETS[/glow]


http://postimg.org/gallery/PROFIT CYCLE/ (http://postimg.org/gallery/fu4a0dn2/)

http://postimg.org/gallery/BitCoin_Arbitrage/ (http://postimg.org/gallery/fu4a0dn2/) :P

Contact me with any questions.  We are taking on new investors.

Bitcoin.receipts@gmail.com

here there is one guy running, i don't know if he is still active, but seeing how he is newbie, better to run the bot on a isolated enviroment

https://bitcointalk.org/index.php?topic=998562.0

I was usually playing using arbitrage trading. after I read the thread that you have to offer, I'm really interested in these boots. but he is no longer active, I've tried to send email

To do this strategy, you'll need some amount of USD and some amount of BTC
as you go through this you will always have the same amount of BTC.

yes of course, at least I have 1BTC capital and that was enough. not too big and not too small. right? :D

All been said, is there still any good websites to do the arbitrage, seeing that the difference between all the exchangers at bitcoinwisdom dot com is a dollar or two and that can easily be eaten up by trading fees.
Any idea?

there is a platform for arbitrage that support some exchanges, but you essentially need to find the best exchange in which the price is lower and the best i which highter

i would suggest to do this with altcoin, because they have a less confirmation time

look something like this is pretty good, but it's not complete at all http://bitcoinpricelab.com/

Thank you Amph for the information, this look quite professional having all major altcoin prices compared together on a page. Have you use the information from bitcoinpricelab.com to do any profitable arbitrage?
Please which one and how did you go about it.

i think doing it manually, is not worth it, you need a bot for this, also i don't like exchange that require verification like bitstamp

playing between hitbtc and any other seems very convenient

p.s. i heard that hitbtc is not that safe, that's whyt he price is so high, something fishy there

found this https://www.youtube.com/watch?v=-aNBGt0dNRg, it seems too much of an easy money

Does anyone know where can I find a software to help me with my trading arbitrage?
please leave some suggestions!

I am writing my own code and I'm still looking for a collab.

There's another bot called SpreadBot 1000, but I've never tested it.

hey bro theprofit here is 2euros and not 2 dollars.  8) ;D 8)

i posted it above your post, you need to contact the guy with the youtube video, but be aware of malicious software, run it on VM or something

Arbing between the exchanges is not worth it....the fees will wipe out whatever profit you make, unless off course you use a large capital. But good luck finding trades for big amounts.

i don't think it't of any relevance as the deposit fees is same for both small and large deposits, so the capital is not a factor considered in it, unless you do want to make a living off it.

I see some green in my app recently...

man, the MtGox days were beautiful for arbitrage  8)

Is there a complete list of exchanges with an API somewhere?

It can work if you fast reflexes and a high enough margin.

One of the most common sort of arbitrage situations is most of the sellers on localbitcoin are just buying from exchanges, getting paid with a high markup, and buying more from the exchanges while pocketing the difference.

there is but it's a bit old

http://www.programmableweb.com/news/46-bitcoin-apis-bitstamp-bitcoin-charts-markets-and-50btc/2013/06/11

A bit... :)

They still list MtGox and Tradehill... ^^