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Author Topic: Arbitrage Opportunity? Tell me why this may be wrong.  (Read 1560 times)
mekanical
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October 08, 2013, 11:11:08 PM
 #1

It would seem to me that someone with a verified account on both Bitstamp and Mt. Gox has an obvious arbitrage opportunity.  That is, that the difference in price ( (134.5-124.Cool/134.5 = 7.2% ) is greater than net amount of fees through the transfer process:  (bank -> bitstamp -> buy bitcoins -> Mt. Gox -> sell bitcoins -> bank).  Maybe I am incorrect here as I haven't tried it yet.....  has anyone attempted to take advantage of this?
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aceking
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October 09, 2013, 09:49:10 AM
 #2

it is wrong because you will be waiting over a month to get your usd out of mtgox.
(in theory is ok , but for practical reasons is not)
c0inbuster
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October 09, 2013, 04:01:18 PM
 #3

When calculating price, don't just have a look at higher bid and lower ask.
Have a look at bid and ask for a given volume of BTC.

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pand70
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October 09, 2013, 04:14:52 PM
 #4

The arbitrage between Mt.Gox and Bitstamp is so obvious and tempting...
Of course there are all those posts about the delays in withdrawing funds from Gox but still i am that close in trying it myself..

daybyter
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October 09, 2013, 06:42:09 PM
 #5

If you want to develop a bot for this, let me know. I'm always interested in a collab. I'm monitoring this spread anyway:


twentyseventy
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October 09, 2013, 07:05:50 PM
 #6

it is wrong because you will be waiting over a month to get your usd out of mtgox.
(in theory is ok , but for practical reasons is not)

This is the correct answer. The Mt. Gox price is artificially high because it's so hard to get money out of Gox
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October 09, 2013, 08:36:02 PM
 #7

The arbitrage between Mt.Gox and Bitstamp is so obvious and tempting...
Of course there are all those posts about the delays in withdrawing funds from Gox but still i am that close in trying it myself..

BTC-e -> Gox   good


Игра на большие дистанции - не терпит суеты.
mekanical
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October 09, 2013, 11:10:48 PM
 #8

it is wrong because you will be waiting over a month to get your usd out of mtgox.
(in theory is ok , but for practical reasons is not)

This is the correct answer. The Mt. Gox price is artificially high because it's so hard to get money out of Gox

Assuming the withdraw from Mt. Gox is the last step, this doesn't matter much to me.  Even if the final withdraw takes 1-2 months, a relatively risk free 5% return over that time frame is pretty solid.  It beats just about any hedge fund that I know of.  Not to mention this can be repeated over and over simultaneously
odolvlobo
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October 09, 2013, 11:27:52 PM
 #9

Assuming the withdraw from Mt. Gox is the last step, this doesn't matter much to me.  Even if the final withdraw takes 1-2 months, a relatively risk free 5% return over that time frame is pretty solid.  It beats just about any hedge fund that I know of.  Not to mention this can be repeated over and over simultaneously

Relatively risk free? I think not. Plus, from what I've heard 1-2 months is optimistic. What if it is 4-6 months?

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mekanical
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October 10, 2013, 12:02:48 AM
 #10

Assuming the withdraw from Mt. Gox is the last step, this doesn't matter much to me.  Even if the final withdraw takes 1-2 months, a relatively risk free 5% return over that time frame is pretty solid.  It beats just about any hedge fund that I know of.  Not to mention this can be repeated over and over simultaneously

Relatively risk free? I think not. Plus, from what I've heard 1-2 months is optimistic. What if it is 4-6 months?

First, arbitrage is perfectly legal.  A large portion of banking and hedge fund profits come from various forms of arbitrage. I'm not concerned about the legality of this.

The only "risks" here are:

a) You may not be able to get a withdraw processed from Mt Gox. 

b) You may incur fees in the transfer process that destroy your net profit.

I am less worried about item a) than item b).  I've made a few withdraws from Mt. Gox in dollars, with the most recent one taking about 2 weeks.  I did get hit with a pretty massive transfer fee (~30$), but i think that it was a flat rate, and thus isn't much of a concern for this process.  The longer the process takes the less attractive it is as an investment obviously.   Inflation runs at 2+ % a year and there are many ways to earn a low risk 2%-5% per year.... so I obviously want to do better than that or my money is much better off elsewhere.  Factoring in the hassle this may be, i wouldn't want to do it unless I could run the same quantity of money through the process at least a couple times in a year. 

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October 10, 2013, 09:08:29 AM
 #11

The arbitrage between Mt.Gox and Bitstamp is so obvious and tempting...
Of course there are all those posts about the delays in withdrawing funds from Gox but still i am that close in trying it myself..

Gox can perpetuate the scheme until there is new inflow.

Be prepared for the spread to increase further as they blow up.




Agorastos
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October 10, 2013, 09:15:51 AM
 #12

whoever is trading on mtgox is not really trading bitcoins but he is trading MTGOXBITCOINS.

and mtgox is shortselling real btc on large scale.

stop bruning your money, invest your money in real companies that produce important goods
daybyter
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October 10, 2013, 11:28:46 AM
 #13

You can also wait until the rates are pretty much even (happens from time to time) and then just move the money back. I already did this manually and it worked. Even if you take a small loss then, you should end up with some overall profit.

BitThink
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October 10, 2013, 11:39:39 AM
 #14

It would seem to me that someone with a verified account on both Bitstamp and Mt. Gox has an obvious arbitrage opportunity.  That is, that the difference in price ( (134.5-124.Cool/134.5 = 7.2% ) is greater than net amount of fees through the transfer process:  (bank -> bitstamp -> buy bitcoins -> Mt. Gox -> sell bitcoins -> bank).  Maybe I am incorrect here as I haven't tried it yet.....  has anyone attempted to take advantage of this?

Previously there're too many investing options provide more reward than this arbitrage (around 2-3% in 2-3 months). For example, Ukyo.loan provided almost risk-free 0.05% per day interest, and you don't need to do anything other than holding and there's better liquidity.

But now since the BTC securities are almost dead after closing of btct and semi-dead of BitFunder, maybe people will be interested in this arbitrage again. But beware that storing large fund in the Mt. Gox may be not risk-free.     
omio
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October 11, 2013, 12:15:40 PM
 #15

You will be left holding a bag of gox money that can't be transferred anywhere because it doesn't exist. Who in their right mind would send fiat to gox when they can buy bitcoin cheaper everywhere else? Gox has no USD.
mekanical
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October 11, 2013, 05:57:37 PM
 #16

You will be left holding a bag of gox money that can't be transferred anywhere because it doesn't exist. Who in their right mind would send fiat to gox when they can buy bitcoin cheaper everywhere else? Gox has no USD.

Anyone have experience getting a recent (within the last month or so) withdraw in USD processed from mt. gox?
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