#ArbitrageTradingStrategy ### **Arbitrage Trading Strategy**

Arbitrage is a trading strategy that exploits price differences of the same asset across different markets to lock in risk-free profits.

#### **Types of Arbitrage:**

1. **Spatial Arbitrage** – Buying an asset (e.g., Bitcoin) on one exchange where it’s cheaper and selling it on another where it’s priced higher.

2. **Triangular Arbitrage** – Exploiting price discrepancies between three cryptocurrencies (e.g., BTC → ETH → USDT → BTC) on the same exchange.

3. **Statistical Arbitrage** – Using algorithms to identify mispriced assets based on historical correlations.

4. **Merger Arbitrage** – Betting on price convergence after a merger or acquisition announcement.

#### **Execution & Risks:**

- Requires fast execution (low latency) to avoid slippage.

- Exchange withdrawal fees and transfer delays can erode profits.

- Regulatory differences may restrict arbitrage opportunities.

Arbitrage is most effective in inefficient markets with low competition.