#ArbitrageTradingStrategy

I do not practice arbitrage, although I work with four different platforms. At times, I have seen how the price of BTC or another token varied substantially between one and the other. If I had done what the founder of FTX, Sam Bankman-Fried, did by buying BTC in the US and selling it in Korea for almost 50% more due to the regulatory difficulties of the Asian country at that time with cryptocurrencies, I would have gotten rich.

Arbitrage in trading focuses on exploiting the temporary price differences between identical assets found in different markets. Factors such as supply and demand imbalances, trading volume, and geographical limitations can cause price discrepancies. Arbitrageurs seek to profit from the outcome of market inefficiencies by buying an asset at a lower price in one market and selling it at a higher price in another.

This financial investment activity, which involves finding and executing trades quickly before market conditions normalize, requires significant capital, deep market knowledge, and advanced trading technology. Arbitrage, often perceived as a low-risk strategy due to effective position hedging, nonetheless involves managing various risks associated with specific types of trades.

Although price differences are typically small and short-lived, the cumulative impact can be substantial when executed on a large scale. Consequently, arbitrage is frequently used by hedge funds and other sophisticated investors.