EZ money? Alright, bet. So, arbitrage trading strats?
It's basically about finding those glitches in the Matrix when it comes to prices. Think of it like this:
You see a fire pair of sneakers for $100 at one online store, but then you hop on another site and see the exact same sneakers going for $120.
What do you do? You cop the $100 pair and immediately flip 'em for $120. Boom! Easy $20 profit, basically risk-free because you knew the prices at both spots.
That's arbitrage, but for stocks, crypto, currencies, etc. It's not about guessing if the price will go up or down later; it's about seeing the price difference right now and taking advantage of it instantly.
* Low-Key Flex: It's supposed to be "risk-free" because you're buying and selling simultaneously. No market guessing game needed. But like, sometimes fees or network delays can be a low-key L.
The Main Strategies (like different TikTok trends):
* Cross-Exchange Arbitrage (The OG):
* The Play: Bitcoin is $70,000 on Coinbase, but $70,010 on Binance. You hit "buy" on Coinbase and "sell" on Binance at the same time. You just made $10 per BTC. EZ money.
* Why it's a thing: Crypto markets are still a bit wild, with tons of different exchanges, so prices can get a little out of sync.
* Triangular Arbitrage (The Mind Bender):
* The Play: This is when you mess with three different currencies (or cryptos) on one exchange. Let's say:
* You have USD.
* You buy ETH with your USD.
* Then you use that ETH to buy BTC.
* Then you use that BTC to buy back into USD.
* If the math works out, you end up with more USD than you started with. It's like a money-making loop!