BitHappy
--
There are significant price differences in spot markets across different exchanges, how to arbitrage?
Taking $WCT as an example from yesterday afternoon!
The core of this arbitrage is to profit from the price difference.
This time, there are three prices: BN spot, BN contract, and a certain X spot. We need to compare whether there is a price difference between different prices and then consider arbitrage strategies.
We can create three scenarios:
1) When the BN spot price is higher than the BN contract price, can we arbitrage?
2) When the BN spot price is higher than the certain X spot price, can we arbitrage?
3) When the BN contract is nearly equal to the certain X spot price, we cannot arbitrage.
______________________
Arbitrage Strategies:
There are only two actual situations where price differences occur, so let's think about the arbitrage strategies respectively.
1) When there is a price difference between spot and contract, we can only wait for the market to automatically correct itself, and there is basically no arbitrage space.
However, there are four possible scenarios:
1. Spot rises, leading the contract price to continue rising, continue waiting for the prices to level out.
2. Spot does not rise, contract price rises, prices level out.
3. Spot falls to the contract price, after leveling out, both spot and contract prices fall together.
At this point, it's pure gambling, with a probability of 66.66% that buying spot won't incur a loss, but this does not count as arbitrage.
______________________
2) When the BN spot price is higher than the certain X spot price, the underlying logic of arbitrage is to sell high and buy low!
Actual corresponding operation:
1. First, sell the BN spot, then buy the certain X spot, a single operation can increase the cryptocurrency base;
In a loop, cash out the certain X spot purchased and sell it in BN, finally selling can significantly increase the USD base, and not selling can also significantly increase the cryptocurrency base.
However, this strategy requires having WCT tokens in advance.
2. First, buy the certain X spot, then sell the BN spot, allowing the USD base to appreciate through the price difference;
In a loop, cash out the USD obtained from selling BN to buy certain X spot, then cash out the spot to sell in BN, ultimately achieving significant appreciation in the USD base.
This strategy only requires assets other than WCT, suitable for most friends.
Taking $WCT as an example from yesterday afternoon!
The core of this arbitrage is to profit from the price difference.
This time, there are three prices: BN spot, BN contract, and a certain X spot. We need to compare whether there is a price difference between different prices and then consider arbitrage strategies.
We can create three scenarios:
1) When the BN spot price is higher than the BN contract price, can we arbitrage?
2) When the BN spot price is higher than the certain X spot price, can we arbitrage?
3) When the BN contract is nearly equal to the certain X spot price, we cannot arbitrage.
______________________
Arbitrage Strategies:
There are only two actual situations where price differences occur, so let's think about the arbitrage strategies respectively.
1) When there is a price difference between spot and contract, we can only wait for the market to automatically correct itself, and there is basically no arbitrage space.
However, there are four possible scenarios:
1. Spot rises, leading the contract price to continue rising, continue waiting for the prices to level out.
2. Spot does not rise, contract price rises, prices level out.
3. Spot falls to the contract price, after leveling out, both spot and contract prices fall together.
At this point, it's pure gambling, with a probability of 66.66% that buying spot won't incur a loss, but this does not count as arbitrage.
______________________
2) When the BN spot price is higher than the certain X spot price, the underlying logic of arbitrage is to sell high and buy low!
Actual corresponding operation:
1. First, sell the BN spot, then buy the certain X spot, a single operation can increase the cryptocurrency base;
In a loop, cash out the certain X spot purchased and sell it in BN, finally selling can significantly increase the USD base, and not selling can also significantly increase the cryptocurrency base.
However, this strategy requires having WCT tokens in advance.
2. First, buy the certain X spot, then sell the BN spot, allowing the USD base to appreciate through the price difference;
In a loop, cash out the USD obtained from selling BN to buy certain X spot, then cash out the spot to sell in BN, ultimately achieving significant appreciation in the USD base.
This strategy only requires assets other than WCT, suitable for most friends.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.