What is Arbitrage in Trading?
Arbitrage is a strategy that consists of taking advantage of price differences (Spread) of the same asset across different markets or trading pairs. Essentially, it involves buying where it is cheaper and selling where it is more expensive, thereby obtaining a profit from that difference without needing to assume directional risk (i.e., without needing the price to go up or down over time).
Where is it applied?
In the crypto ecosystem, arbitrage can occur in different forms:
Between exchanges: buying a cryptocurrency on an exchange where it is cheaper and selling it on another where it is priced higher.
Between trading pairs: for example, taking advantage of the difference between ETH/USDT and ETH/ARS within the same exchange.
Between fiat currencies: Binance has pairs like ARS/USDT, BRL/USDT, TRY/USDT, where the spread (difference between buying and selling price) can create opportunities.
Practical example:
Let's assume that the price of 1 USDT is equivalent to:
1000 ARS in the ARS/USDT pair
1050 ARS in the BTC/ARS pair, considering the conversion from BTC to USDT in parallel.
This difference can represent an arbitrage opportunity if the commission costs are low or nonexistent (as happens with many pairs promoted by Binance).
Key considerations:
Liquidity: a wide spread is not always profitable if there is not enough volume to execute trades quickly.
Fees: you should always consider if the net arbitrage compensates for the fees.
Speed: markets are dynamic; these opportunities can disappear in seconds.
Useful tools: TradingView, depth charts, and Binance's order book can help you detect these inefficiencies.
Why is it important?
Arbitrage can not only represent a source of income for attentive traders, but it also helps balance prices across markets, bringing efficiency to the crypto ecosystem.
Arbitrage is a strategy used by traders to profit from price differences of the same asset across different markets or pairs.
🔁 Simple example:
If BTC is at $66,000 in a BTC/USDT pair, and at $66,500 in BTC/ARS, you could buy low and sell high in seconds. That difference is the spread that can yield you an immediate profit.
💡 Key tip:
In Binance, fiat/crypto pairs like ARS/USDT, BRL/USDT, TRY/USDT have wider spreads than traditional pairs, and some even have 0% Maker fee!
Arbitrage requires speed, precision, and good analysis, but it can be a gold mine if you find inefficiencies before others.
