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đž #ArbitrageTradingStrategy â Profit from price differences
đ What is it?
The Arbitrage Trading Strategy consists of taking advantage of price differences of the same asset in different markets or platforms to make a profit without exposure to market risk.
Example: Buy Bitcoin on exchange A for R$ 100.000 and sell on exchange B for R$ 101.000. Profit = R$ 1.000 (minus fees).
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đ Types of arbitrage:
1. Spatial (between exchanges)
â Buy on one, sell on another.
2. Temporal
â Buy now, sell later when there is a price lag between platforms.
3. Triangular (within the same exchange)
â Explores inefficiencies between pairs like BTC/ETH, ETH/USDT, BTC/USDT.
4. Futures and spot (cash and carry)
â Buy in the spot market, sell in the futures market (or vice versa), taking advantage of differences between markets.
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â Advantages:
Almost zero market risk (if executed correctly).
Strategy based on mathematical logic, not on prediction.
Can be automated with bots.
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â ïž Disadvantages:
Price differences tend to be small.
High fees, slippage, and transaction time can erode profit.
Requires high execution speed and capital available across multiple platforms.
Risk of withdrawal freezes or KYC in exchanges.
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