Arbitrage trading is a strategy that exploits price differences for the same asset across different markets or exchanges. Traders buy low in one market and sell high in another, securing a profit with minimal risk. In crypto markets, where price discrepancies often occur due to fragmented liquidity and varying demand, arbitrage can be particularly effective. Common types include spatial arbitrage (between exchanges) and triangular arbitrage (within one exchange using three pairs). While the profit margins per trade are often small, high-frequency execution and automation can generate consistent returns. However, speed, fees, and market volatility remain critical factors for success.
