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Author Topic: Arbitrage without transferring coins?  (Read 1125 times)
cafucafucafu
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September 16, 2014, 06:49:11 PM
 #1

Transferring coins between exchanges seems like an impossibility for the speed that arbitrage would require. Am I wrong?

Can arbitrage be done without transfers? 


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vlad12
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September 16, 2014, 07:29:57 PM
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That's at least a maybe. An interesting opportunity is to monitor BTC-e vs Bitfinex, and score on temporary price discrepancy by opening opposing margin trades on both simultaneously and exiting simultaneously. Example... somehow they are too divergent and nothing too insane is happening (like another MtGox)... then if bitfinex is higher you short bitfinex, long BTC-e, wait for the recovery and close the positions when they are close again in price.

No coin movement, but the fees may not make it worth it. What you then have to worry about is exit strategies in case something does go wrong. Disclaimer: Something will go wrong.

cafucafucafu
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September 16, 2014, 11:16:05 PM
 #3

That's at least a maybe. An interesting opportunity is to monitor BTC-e vs Bitfinex, and score on temporary price discrepancy by opening opposing margin trades on both simultaneously and exiting simultaneously. Example... somehow they are too divergent and nothing too insane is happening (like another MtGox)... then if bitfinex is higher you short bitfinex, long BTC-e, wait for the recovery and close the positions when they are close again in price.

No coin movement, but the fees may not make it worth it. What you then have to worry about is exit strategies in case something does go wrong. Disclaimer: Something will go wrong.

Even if this works perfectly, you will lose money if the price is going down. But BTC will be gained.


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joesmoe2012
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September 17, 2014, 01:02:25 AM
 #4

Any arbitrage that can be easily done is already being done. Unless you can find something nobody else is doing, in which case i'd recommend keeping your mouth shut about it.

cafucafucafu
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September 17, 2014, 01:39:53 AM
 #5

Any arbitrage that can be easily done is already being done. Unless you can find something nobody else is doing, in which case i'd recommend keeping your mouth shut about it.

My contention is that there is no easy arbitrage.


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joesmoe2012
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September 17, 2014, 04:56:53 AM
 #6

Any arbitrage that can be easily done is already being done. Unless you can find something nobody else is doing, in which case i'd recommend keeping your mouth shut about it.

My contention is that there is no easy arbitrage.

There's still smaller arb ops out there, but most of the larger ones are already very wall watched and taken advantage of.

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September 17, 2014, 10:01:25 AM
 #7

Transferring coins between exchanges seems like an impossibility for the speed that arbitrage would require. Am I wrong?

Can arbitrage be done without transfers? 
if you do not see chances and solutions to do arbitrage on your own, then you do not deserve the profit from arbitrage.
Just do your researches and you will see, if it's possible or not.

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September 17, 2014, 11:02:33 AM
 #8

Isn't the point of arbitrage to trade on 2 or more exchanges at the same time? So, if you have balances on 2 exchanges, you can do arbitrage without transfers.

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September 17, 2014, 12:39:11 PM
 #9

Transferring coins between exchanges seems like an impossibility for the speed that arbitrage would require. Am I wrong?

Can arbitrage be done without transfers? 

There are many types of arbitrage.

You can arbitrage between currency pairs on one exchange. For example, if you have three pairs of the form:

LTC/USD
LTC/BTC
BTC/USD

You can wait for an opportunity to go between USD->LTC->BTC->USD (i.e buying LTC with USD, buying BTC with that LTC and then selling the BTC for USD) and end up with more USD than you started with due to market inefficiencies. In practice you'll find that these opportunities will be rare in established exchanges, but they will exist.

Of course you will need a bot to do this, and you'll need it to be extremely fast.

Cheers, Paul.

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September 19, 2014, 02:47:36 PM
 #10

Isn't the point of arbitrage to trade on 2 or more exchanges at the same time? So, if you have balances on 2 exchanges, you can do arbitrage without transfers.

No you can't.

Let's say you are scalping XMR on Polo, MintPal, and Bittrex...
Which has been well worth it because the spread is typically about 3% and roundtrip cost is about 0.4%...
And the whole point is to capture that 3% plus any discrepancies between exchanges.

Well, what happens soon...
The exchange where you are doing a lot of selling...
You end up with zero XMR and a lot of BTC...

And the exchange where you are doing a lot of buying...
You end up with a ton of XMR and zero BTC.

So you are always moving around both XMR and BTC between exchanges.

It's better to just call it Market Making and providing liquidity for a fee...
A perfectly honorable profession and a crucial public service to the capital markets.

There are at least 20+ coins and growing where you do this...
And you can always provide liquidity for new listings with a lot of action.

It's Windows 95 in the Crypto Space... this is all gonna get MUCH bigger fast.

Oh, and it helps a lot to be automated and experienced.
arbitrage001
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September 19, 2014, 05:05:06 PM
 #11

The price gap on new coin usually make it hard to arbitrage between exchanges. It is easier to be a market maker on new coin.
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