Bitcoin arbitrage, pros and cons, experience and profitability

[joesmoe2012]

I have engaged in alot of arbitrage over the years, though I must say that in BTC and LTC at this point, there is little spread, even with the most advanced bots (i don't think there are really such fast HFT bots in this space yet), you still cannot make money on a non-existent spread.

[crazyivan]

Crazyivan, you are doing nothing but wasting your time.


Whether Arbitrage is profitable or not. Nobody will tell you their method.


Why? Use your damn brain?

WHy would they want you to steal their arbitrage opportunites?

Why should I teach you my method and have you put a bid or ask one satoshi difference from mine and you get a fill and I don't. You make a profit and I don't. Why in the world should I teach you that.

Only person that would teach you that, is if he got something in return such as subscribing to your scam site.



Only way to make money in Bitcoin in the short term is by trading it. Mining is not profitable and neither is buying 1 BTC and hoping and praying to the Gods that it goes to $100,000 one day.

Wrong!! Why? Cause not everyone is a greedy ass like you might be and some people might actually discuss their options as some of us already did in this thread. I am not asking anyone to teach me the exact method, I am interested in general strategies how people do arbitrage. I have been in Bitcoin for a couple of years, been investing into arbitrage, securities, cloud mining and mine by myself. In other words, I could probably share some of interesting strategies with most of people here and this is what I ll do. Recently, I have been quite successful in playing with Darkcoin, the price moves +/-5% almost every day for the last couple weeks. Basically, the easiest arbitrage opportunity there is. So go saturate it now. As you can see, this is a free advice, no catch, no angle, just something I like to share with other people cause I am a nice person.

Enjoy

[ShakyhandsBTCer]

I have engaged in alot of arbitrage over the years, though I must say that in BTC and LTC at this point, there is little spread, even with the most advanced bots (i don't think there are really such fast HFT bots in this space yet), you still cannot make money on a non-existent spread.

HFT programs seek to take advantage of spreads in pennies or less. The spreads between exchanges are much higher then that. HFT along with other traders still face the issue of moving funds between exchanges

[wenben]

I have engaged in alot of arbitrage over the years, though I must say that in BTC and LTC at this point, there is little spread, even with the most advanced bots (i don't think there are really such fast HFT bots in this space yet), you still cannot make money on a non-existent spread.

HFT programs seek to take advantage of spreads in pennies or less. The spreads between exchanges are much higher then that. HFT along with other traders still face the issue of moving funds between exchanges

Can't move large sum of money between exchanges without getting attention from your bank and your government.

[ShakyhandsBTCer]

I have engaged in alot of arbitrage over the years, though I must say that in BTC and LTC at this point, there is little spread, even with the most advanced bots (i don't think there are really such fast HFT bots in this space yet), you still cannot make money on a non-existent spread.

HFT programs seek to take advantage of spreads in pennies or less. The spreads between exchanges are much higher then that. HFT along with other traders still face the issue of moving funds between exchanges

Can't move large sum of money between exchanges without getting attention from your bank and your government.

Exactly. HFT on stock exchanges do not need to worry about moving money from exchange to exchange as all trades are settled via their bank account AFAIK

[ShakyhandsBTCer]

used to buy ltc on btc-e and sell it on kraken when the difference was at least 1 ltc per btc and repeat, worked for about a month, its not possible anymore as prices are the same

That is interesting, I have never thought of attempting arbitrage between altcoins.

Out of curiosity how much BTC were you able to get out of this?

[crazyivan]

There are always these kind of opportunities. People who say it is not possible are just to lazy to follow the market closely. I ve mentioned DRK, for about a week, Darkcoin was fluctuation +/-5% per day on a SINGLE exchange. All I needed to do was to purchase in the morning at -5% and sell in the evening at +5%. Similar case was with Kittehcoin about a month ago, the price was constantly hovering between 0.00000001 and 0.00000002 BTC. I was buying at lower price and selling at higher price, was able to do this 6 times and make 600%. Arbitrage is there and it is possible, just takes a lot of effort to make money by playing it. 

[spin]

All I needed to do was to purchase in the morning at -5% and sell in the evening at +5%.

That's not arbitrage. Arbitrage is supposed to be risk free.  Easy to say that you are getting higher returns if you say you do arbitrage but in reality you are just speculating / day trading.  It's not arbitrage if a price movement before you close your position affects the profit.  

edit: Risk free is strong word there.  Clarity: Arbitrage should not be exposed to price movements.  Of course there are other risks like credit risk of the exchange etc.

[crazyivan]

All I needed to do was to purchase in the morning at -5% and sell in the evening at +5%.

That's not arbitrage. Arbitrage is supposed to be risk free.  Easy to say that you are getting higher returns if you say you do arbitrage but in reality you are just speculating / day trading.  It's not arbitrage if a price movement before you close your position affects the profit.  

edit: Risk free is strong word there.  Clarity: Arbitrage should not be exposed to price movements.  Of course there are other risks like credit risk of the exchange etc.

No true, there is always risk in trading. Also, by definition, crypto arbitrage is taking advantage of price difference between coins on different or the same exchange.

[ShakyhandsBTCer]

All I needed to do was to purchase in the morning at -5% and sell in the evening at +5%.

That's not arbitrage. Arbitrage is supposed to be risk free.  Easy to say that you are getting higher returns if you say you do arbitrage but in reality you are just speculating / day trading.  It's not arbitrage if a price movement before you close your position affects the profit.  

edit: Risk free is strong word there.  Clarity: Arbitrage should not be exposed to price movements.  Of course there are other risks like credit risk of the exchange etc.

You should have zero risk when executing an arbitrage properly

[crazyivan]

You cannot have zero risk. Even when you have funds to purchase at one exchange and coins to sell on the other exchange at the same time, there is always possibility of the price or quantity changing while you perform your transactions. There are bots on the market which can speed up the entire process but even these bots can make mistakes. There is always risk when dealing with BTC.

[spin]

You cannot have zero risk. Even when you have funds to purchase at one exchange and coins to sell on the other exchange at the same time, there is always possibility of the price or quantity changing while you perform your transactions. There are bots on the market which can speed up the entire process but even these bots can make mistakes. There is always risk when dealing with BTC.

I agree you cannot have zero risk.  You are always left to some extent with the risk of the exchange(s) going down, some execution risk etc. 

But the key thing you should not have in arbitrage is exposure to the price of the underlying asset.  What you call arbitrage above is not arbitrage because you are just betting that the price will follow some pattern.  Buying when it's down in the morning and selling in the afternoon is not arbitrage.

[crazyivan]

You cannot have zero risk. Even when you have funds to purchase at one exchange and coins to sell on the other exchange at the same time, there is always possibility of the price or quantity changing while you perform your transactions. There are bots on the market which can speed up the entire process but even these bots can make mistakes. There is always risk when dealing with BTC.

I agree you cannot have zero risk.  You are always left to some extent with the risk of the exchange(s) going down, some execution risk etc. 

But the key thing you should not have in arbitrage is exposure to the price of the underlying asset.  What you call arbitrage above is not arbitrage because you are just betting that the price will follow some pattern.  Buying when it's down in the morning and selling in the afternoon is not arbitrage.

I disagree but it does not matter. LTC has been going down big time, however, not all exchanges follow this trend the same way. I was able to catch a few arbitrage opportunities due to this.

[ShakyhandsBTCer]

You cannot have zero risk. Even when you have funds to purchase at one exchange and coins to sell on the other exchange at the same time, there is always possibility of the price or quantity changing while you perform your transactions. There are bots on the market which can speed up the entire process but even these bots can make mistakes. There is always risk when dealing with BTC.

I agree you cannot have zero risk.  You are always left to some extent with the risk of the exchange(s) going down, some execution risk etc. 

But the key thing you should not have in arbitrage is exposure to the price of the underlying asset.  What you call arbitrage above is not arbitrage because you are just betting that the price will follow some pattern.  Buying when it's down in the morning and selling in the afternoon is not arbitrage.

True arbitrage would usually involve exchanges that for all intensive purposes are not going to fail. You should never have execution risk, as this risk is essentially that you cannot execute your trades quickly enough to capture your profit and if you have this kind of risk then you are doing something wrong. 

[adif2010]

I think very difficult to make arbitrage in trade BTC 

[crazyivan]

I think very difficult to make arbitrage in trade BTC 

Recently it has. Most of people are expecting BTC price to go up and have chosen long position, consequently, volumes are quite low. Hope this is going to change soon.

[crazyivan]

This Urocoins s nice for arbitrage, lots of price discrepancies on different exchanges ATM.

[counter]

I tried to arbitrage a few coins recently for the first time.  I remember when there was a good difference in price last year and people were making good coin arbitraging.  I really didn't make much profit but I was able to learn if the effort is worth it.  I think it is if you do the math and make a plan before hand especially if it is your first time. 

To those that don't see the need to share how to arbitrage I just want to say they are not going to be able to make every trade all the time..  There is no reason why we all can't share info so other people are able to make money at some point.  People have come here to to share information, remember?

[Nagle]

The basic problem with Bitcoin arbitrage is that you need at least two non-flaky exchanges.  Ones where, when you tell them to wire transfer money out, they do so, immediately, every time.

[crazyivan]

The basic problem with Bitcoin arbitrage is that you need at least two non-flaky exchanges.  Ones where, when you tell them to wire transfer money out, they do so, immediately, every time.

Could not agree more. The same things goes for banks.