$BTC Arbitrage trading is a fascinating and often misunderstood strategy in financial markets. At its core, it's about exploiting temporary price discrepancies for the same, or highly similar, assets across different markets to generate a risk-free (or very low-risk) profit.
Here's a comprehensive breakdown of the arbitrage trading strategy:
1. The Fundamental Principle:
The core idea is simple:
* Buy Low: Identify an asset that is priced lower in one market.
* Sell High: Simultaneously, or almost simultaneously, sell the exact same asset in another market where it is priced higher.
* Pocket the Difference: The profit is the difference between the higher selling price and the lower buying price, minus any transaction costs (which are crucial for smaller discrepancies).