probably a stupid question about Poloniex/Bittrex arbitrage

[vuduchyld]

I've noticed that there can be a fairly significant price difference between the exchanges and I was wondering if there is a lot of arbitrage between the two.

for example, I noticed today that one particular coin that will remain nameless had an order book that would allow me to buy just a little over 300 coins at around .00438xxx-.00439 without pushing the ask up any higher than .00439.  The other exchange had an ask of 300 coins at .00444

Obviously, this is only a spread of .0005 BTC, but at 300 coins, it seems as though one could buy the coin, transfer, pay the .4% for round trip, and still make around $80 if my calculation was correct.

If there were tradebots at work, I'd think the spreads between exchanges would be lower.  What am I missing, here?

[TiberiuC]

Don't think there are any bots to arbitrage beetween exchanges.

[thrax]

It often takes a long time to send coins from one exchange to another. By the time your coins arrive at an exchange and are confirmed their price has usually dropped. I'm sure that bouncing coins between exchanges sometimes works, but I have been burned a few times doing it.

[jonybroker]

There is so much chances to arbitrage in both exchanges, but you need to have money both account and coins too you want to arbitrage.

[vuduchyld]

Ah...I figured it would be possible to transfer between wallets on different exchanges reasonably quickly. If the transfer were possible within 3-5 minutes, you could just keep a BTC balance on each exchange. The round trip would be:

BTC to alt, alt to alt on other exchange, alt to BTC. So it would be a BTC to BTC round trip.

I should have just tried to see what roadblocks I found. Maybe some alts don't allow wallet it on wallet transactions the way BTC does.

[thrax]

The biggest problem I found was the exchanges often require more confirmations than a normal wallet before they will let you spend your coins. Cryptsy has often left my deposits stuck on pending with over 500 confirmations. Bittrex can require 20 confirmations instead of a wallet's 5 confirmation requirement.

[poornamelessme]

Ah...I figured it would be possible to transfer between wallets on different exchanges reasonably quickly. If the transfer were possible within 3-5 minutes, you could just keep a BTC balance on each exchange. The round trip would be:

BTC to alt, alt to alt on other exchange, alt to BTC. So it would be a BTC to BTC round trip.

I should have just tried to see what roadblocks I found. Maybe some alts don't allow wallet it on wallet transactions the way BTC does.

I used to play with small arbitrage trades, but as others mentioned, you really need to have BTC + whatever coins you want to arbitrage on the right exchange for it to really work. You can try it like you said, but don't be surprised if it takes 30-45 minutes and the prices are completely different by the time your coin gets there.

I've been burned more than once when simply trying to sell a coin I was already holding, seeing a better price at a different exchange... sending it there, and like an hour later seeing worse prices.

[vuduchyld]

Thanks, y'all.  I appreciate the voices of experience.  The time lag didn't really occur to me since I'd be sending some alt from one wallet to another of the same denomination, but that makes total sense based on my experience with BTC.  I might play around with some trades, as long as it is with coins I would be happy to own, anyway. 

[Zer0Sum]

You have to have BTC and coins on all the exchanges...
And you must be trading coins that are stable or being pumped...
(Moving money around can be worthwhile, but secondary).

For 90% of alts there is a natural slope to zero... so coin selection is crucial.

And you have to have lots of infrastructure = APIs and Automation.

In terms of trading...
Any idiot can take a profit...
It's knowing when/how to take a loss that differentiates the men from the boys.

[vuduchyld]

For 90% of alts there is a natural slope to zero... so coin selection is crucial.


In terms of trading...
Any idiot can take a profit...
It's knowing when/how to take a loss that differentiates the men from the boys.

Two solid truths right there.  Thanks.

[Viper1]

Last week I was looking at DOGE on a couple sites and noticed you could by 1.2M for 38 on one site and immediately sell for 39 on Bter. As I was watching someone snapped up all 1.2M. Maybe an hour later, there was some really strange selling at 39 of some number 3xx.xxxxx over and over and over again. I figured it was some bot being stupid and just dumping them "slowly". So it's possible to arbitrage like that but I think you have to be quick about it.