Is Arbitrage legit?

[Auxcordaz321]

I've been looking into ways of making money during quarantine and I've come across the concept of arbitrage. I was wondering if this is legit? I've seen people selling bots for thousands and say its a good investment for long run but I'm wary of it being a scam.

[actmyname]

Bots for arbitrage are most definitely not going to land you a profit, but arbitrage in general is a real exploitative strategy of the time/valuation lag in markets.

The problem with buying bots for it are that you run into the likelihood of it being a scam, or the likelihood of the strategy being too saturated by virtue of its being-sold status.

[jackg]

Actual arbitrage is legit, the bots probably aren't.

Arbitrage is just depositing X amount of n coins on one exchange and the same amount of X n coins on another.
When one drops down in market price, an order executes to buy at the lower price and another order is Plas ced on the other exchange to sell at the higher price so uou still end up with the same amount of funds. You or the bot will then have to withdraw the difference to make the accounts the same again.

[Auxcordaz321]

Bots for arbitrage are most definitely not going to land you a profit, but arbitrage in general is a real exploitative strategy of the time/valuation lag in markets.

The problem with buying bots for it are that you run into the likelihood of it being a scam, or the likelihood of the strategy being too saturated by virtue of its being-sold status.

If these bots works as they claim, why would they be selling it rather than using it themselves? It would make more sense for them to just run it and keep it a secret right? Also these bots do promise for profits so I'm not too sure yet.

Actual arbitrage is legit, the bots probably aren't.

A lot of these bots post screenshots of their results, are they faking the screenshots? It seems like an easily automated process if you can figure out the technicalities.

[actmyname]

If these bots works as they claim, why would they be selling it rather than using it themselves? It would make more sense for them to just run it and keep it a secret right? Also these bots do promise for profits so I'm not too sure yet.

What you just wrote is precisely why the ones that are being sold are not the ones that the developers would actually use. One you start listing an item on the market, you're opening it up to heavy saturation. The profits will either be very minimal, or they will be very quickly.

The opportunity to scam someone is always there, as well, but this happens in nearly every situation.

[crwth]

As a user of an arbitrage bot, it depends on the market condition, whether there would be a big market difference between different pairs in the exchange. It's definitely possible, but remember that other people are possibly using a bot too to arbitrage the market, so it's a matter of how fast you are going to make the trade and how much you are going to risk. Risk by holding a bag in which you cannot sell anymore in profit due to the lag in the market price changes.

You should be wary of which bot you are going to buy if you are ever going to. It's best to research beforehand the reputation of the bot and if it's good as well. You could try Gunbot if you are interested in a trading bot. The community is excellent, and I would personally help you set it up as well. Don't hesitate to PM me for more information about it.

If these bots works as they claim, why would they be selling it rather than using it themselves? It would make more sense for them to just run it and keep it a secret right? Also these bots do promise for profits so I'm not too sure yet.

Those who are promising profits are definitely the ones to scam you.

A lot of these bots post screenshots of their results, are they faking the screenshots? It seems like an easily automated process if you can figure out the technicalities.

The representative of the bots in which they are "promising" profits are the ones who are likely to fake those screenshots. The setting up of bot is the easy process but the technicalities and the code are not. There are a lot of things to consider when you are going to use a legitimate bot.

[Auxcordaz321]

What you just wrote is precisely why the ones that are being sold are not the ones that the developers would actually use. One you start listing an item on the market, you're opening it up to heavy saturation. The profits will either be very minimal, or they will be very quickly.

The opportunity to scam someone is always there, as well, but this happens in nearly every situation.

I'm aware for the possibility of a scam that's why I wanted to post here to verify before I jump the gun. So you think there's a high chance that they keep good version for themselves and sell dysfunctional bots to the users that only show a fraction of the real arbitrage opportunities? It's definitely possible. Is it viable then to develop my own program and assemble a team in order to scout for opportunities on all the exchange sites, as a hand-developed bot would be legit? And since the concept of arb is legit it should work out overall.

Risk by holding a bag in which you cannot sell anymore in profit due to the lag in the market price changes.

I'm assuming you mean that the prices change while during a cycle? That's one of the things I was slightly confused about. If the bot starts a cycle and isn't able to complete it, would it simply try to revert back to the original currency, or does it continue the cycle at a loss. I'm also not sure if it's the bot that performs the transaction, or rather it simply alerts me of the opportunity and I have to do the cycle myself. Thanks for your offer for help.

[crwth]

I'm assuming you mean that the prices change while during a cycle? That's one of the things I was slightly confused about. If the bot starts a cycle and isn't able to complete it, would it simply try to revert back to the original currency, or does it continue the cycle at a loss. I'm also not sure if it's the bot that performs the transaction, or rather it simply alerts me of the opportunity and I have to do the cycle myself. Thanks for your offer for help.

Yes. The price changes in the market during the cycle. The "opportunity" for arbitrage is gone due to the fast price changes in the market. You have a choice whether you want to revert back or just put a limit order to make sure there's a profit. The factor there right now is the time, how long it would take to get back the limit price that is ordered. For the reverting back of the currency, there's already a concern on the fees as well, so a loss in there already if you want always to revert back or just wait for the orders to be filled.

Alerts in bots wouldn't be helpful because opportunities of arbitrage are quite fast in the crypto market; you would need it immediately to execute the trade and not wait anymore. There's also a setting in Gunbot in which you could just choose to market order so it would immediately execute the trade. So there is a factor in the price, and the exchange order book on which what is the "market price" at that current time.

The best thing to do for that is to have a blazing fast connection between your exchange and your server to have more rapid trades as well.

[actmyname]

Is it viable then to develop my own program and assemble a team in order to scout for opportunities on all the exchange sites, as a hand-developed bot would be legit? And since the concept of arb is legit it should work out overall.

The answer is, "maybe."

The problem is because arbitrage is a known concept, but crypto is a fairly new and niche space. With certain markets, especially for new coins, you will definitely be able to make a profit from arbitrage - even probably manually - but when it comes to major exchanges, I'm unsure about the effectiveness of common strategies. You'd have to innovate or get lucky, I think.

[Auxcordaz321]

Is it viable then to develop my own program and assemble a team in order to scout for opportunities on all the exchange sites, as a hand-developed bot would be legit? And since the concept of arb is legit it should work out overall.

The answer is, "maybe."

The problem is because arbitrage is a known concept, but crypto is a fairly new and niche space. With certain markets, especially for new coins, you will definitely be able to make a profit from arbitrage - even probably manually - but when it comes to major exchanges, I'm unsure about the effectiveness of common strategies. You'd have to innovate or get lucky, I think.

What about sports arbitrage, I can see that working out quite well but I'm not too familiar if that is a common enough occurrence to really happen. In sports arb I dont see why the user can't just bet on both outcomes and simply profit on the same match. I've seen the concept before but I'm not sure why its not being more widespread than what is is currently.

[actmyname]

What about sports arbitrage, I can see that working out quite well but I'm not too familiar if that is a common enough occurrence to really happen. In sports arb I dont see why the user can't just bet on both outcomes and simply profit on the same match. I've seen the concept before but I'm not sure why its not being more widespread than what is is currently.

Arbitrage in sportsbooks is quite common. As long as you have exhaustive match results A and B, you can follow this formula for determining whether the arbitrage is +ev or not:

(payoutA - 1) * (payoutB - 1) > 1.

For example, the obvious case is two 2.01x payouts: this guarantees a profit regardless of the result, and the equation returns 1.0201 > 1

[pooya87]

Is it viable then to develop my own program and assemble a team in order to scout for opportunities on all the exchange sites, as a hand-developed bot would be legit? And since the concept of arb is legit it should work out overall.

the time and money that it costs to build something like that is not worth it in my opinion. i have done it myself a couple of years ago and kept the bot running for a moderately long time and i have to say the profit was not large enough to make it worthwhile specially since there is a big risk involved that has led to some losses during this strategy that eats through the small profit.

[famososMuertos]

I've been looking into ways of making money during quarantine and I've come across the concept of arbitrage. I was wondering if this is legit? I've seen people selling bots for thousands and say its a good investment for long run but I'm wary of it being a scam.

Have you ever done manual arbitration...at least 1 Time?
Have you ever configured a bot? at least in some game?
I think you should understand first why you would need to buy a bot.

[joniboini]

I also agree that arbitrage is not worth of your time, except in a few case where there's clearly a huge spread and you can move funds quickly. That chance is so small that probably only one people who will be able to do that, or if they already have funds on each markets. Factoring the transaction fees, your profit would end up smaller than you might think.

Just try to trade on the spot market and move on to margin trading with low leverage, that should be better than chasing spreads across hundreds of exchanges.

[AakZaki]

Using bots for arbitration carries the very risk of losing value once you make a transfer between exchanges. each exchange has a policy of each grace fee because there are some exchanges that are not the same.

You have to study arbitration first, you have to do research on how much the fee and coin price you are going to arbitrate. Do not carelessly use a bot, because it will not guarantee. In fact, many of the same bot scams will be very detrimental.

better learn first before you start.

[BITCOIN4X]

Arbitrage trading is also a way to profit by taking advantage of fluctuation and price differences between 2 or more exchange and it is absolutely not prohibited.
Even so, some arbitrator often make mistake that result in losses and one of them does not consider the transaction fees between exchange. Not all exchange charge the same on the same coin and it should always be an arbitrator consideration if dont want to lose

[CucakRowo]

Arbitrage will be an old story, especially for old markets like forex and stocks. Every broker on those 2 markets already implemented ways to minimize arbitrage activities on their platform. And I am sure, in a moment (maybe in next 1-2 years), arbitration activity will no longer be possible in crypto market. One thing that will limit arbitration activities is transaction fees.

[khaled0111]

As stated above, arbitrage is a totally legit trading strategy. I remember few years ago, it was possible to make good profit even by doing it manually and without using bots. Now, things changed and even with the most sophisticated bots, your chances to make a profit are really slim.

@Auxcordaz321, unlike trading, arbitrage in sports betting is illegal and most bookmakers will ban you because of it.

[Krislaw]

Arbitrage is completely legit as it involves making profit from two different markets. The market is responsible for prices and not the exchange. But for bot trading, it's completely fake as they end up closing and turns out to be scam.
I would advise you to go for manual Arbitrage.

[Upgrade00]

What about sports arbitrage, I can see that working out quite well but I'm not too familiar if that is a common enough occurrence to really happen. In sports arb I dont see why the user can't just bet on both outcomes and simply profit on the same match. I've seen the concept before but I'm not sure why its not being more widespread than what is is currently.

It actually is a quite popular concept (among gamblers at least) but most gambling platforms kick against it and consider it to be unethical, users are usually banned from a site when accused of arbing, so it's not much suggested as a betting strategy.
I would assume links are estalished between accounts when they deposit through bank transfer or use same wallet address when depositing using cryptocurrency.

• Arbitrage trading is legal, but not really worth it, using bots comes with lots of risks.
• Arbitrage gambling is not legal as per the ToS of majority of gambling platforms.