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Author Topic: Arbitrage on 3 exchanges?  (Read 804 times)
BetterBitcoinUp
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January 21, 2013, 03:07:31 AM
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I've been using bitcoinity.org to follow the price of BTC.

I've noticed that MTGOX, BTCE, and BITSTAMP have varied prices throughout the day.

Does anyone here arb these three exchanges?
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payb.tc
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January 21, 2013, 03:19:34 AM
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Does anyone here arb these three exchanges?

yes

a good reason not to though, is that it takes a lot of time/money/paaaaaaaatience just to make $3.

it might be more worthwhile if they all had the volume of mt gox.
mjc
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January 21, 2013, 06:34:33 AM
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Does anyone do it between exchange and across currency?

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Stephen Gornick
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January 21, 2013, 01:18:38 PM
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Does anyone do it between exchange and across currency?

With the help of forex services like CurrencyFair and TransferWise, an individual might find success performing arbitrage against multiple currencies.  For instance, after converting USDs to EUR, you might then be able to buy BTCs on a BTC/EUR market with those EUR at a less cost than what it would have cost using those funds before converting to EUR.

One problem with that is that some exchanges (e.g., Mt. Gox) require that the account the funds come from must be the exchange account owner's own account.  When doing the EUR transfer from CurrencyFair, the sending bank account is CurrencyFair, not the individual trader's account.  Not all exchanges have this restriction.

There's some decent info on arbitrage opportunities here:
 - http://bitcoin-analytics.com  <--- Delayed, unless purchase the premium subscription.


gusti
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January 21, 2013, 01:44:37 PM
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I'm doing some arbs between mtgox / bitstamp / btce, taking advantage of differences between 2% and 3% across exchanges. As E&G pointed out, you need big trading volume to make small profit.

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January 21, 2013, 04:58:47 PM
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I'm doing some arbs between mtgox / bitstamp / btce, taking advantage of differences between 2% and 3% across exchanges. As E&G pointed out, you need big trading volume to make small profit.

I started to write an app that would do this for me.  Once I worked out the math with the over head of moving money and BTC to cover the purchaes, It became apparent t was already being done.  I saw that the margin over the cost to trade and move the money was far low and the gaps closed quickly.  The current gaps are not due to the transaction fees, but do tot he middle man services that it takes to move the money from one exchange to another.

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Timodeus
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January 21, 2013, 05:04:09 PM
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I think that is why Forex has such high leverage, at times almost 100x. That is necessary because of the very small price movements, making leverage a must just to earn any substantial amount. With Bitcoin, I imagine such high leverage is not as necessary or advantageous with the high volatility and relatively low liquidity. It would be interesting though to see if a lower amount of leverage could work with someone attempting arbitrage.

In regard to mjc, it would be interesting if such an app could monitor the prices between exchanges and notify you once a trading opportunity arose.
deadweasel
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January 21, 2013, 05:06:50 PM
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I'm doing some arbs between mtgox / bitstamp / btce, taking advantage of differences between 2% and 3% across exchanges. As E&G pointed out, you need big trading volume to make small profit.

I started to write an app that would do this for me.  Once I worked out the math with the over head of moving money and BTC to cover the purchaes, It became apparent t was already being done.  I saw that the margin over the cost to trade and move the money was far low and the gaps closed quickly.  The current gaps are not due to the transaction fees, but do tot he middle man services that it takes to move the money from one exchange to another.

So it would require, at each exchange, a sum of $ and BTC.  These sums could be quickly wiped out by a program doing arbitrage.  So the overhead of keeping those sums high enough to continue the program and the time it takes to actually move money into the exchange (due to the middle-man) makes the margins very low?  Due to missed gaps when your balances at each exchange become low.

It seems the only serious flaw is getting USD into an exchange in a timely manner.  BTCs could be program to be transferred from one exchange to another, but not USD.  

Damn interesting.  I've wanted to do something like this for a while.  Any other caveats we should be thinking about?

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