What is triangular arbitrage and how to use it?

Brief content

Triangle arbitrage is a sophisticated trading strategy that uses price divergence between three assets. A trader trades one asset for another, the second for a third, and the third for the first to profit from the difference in price.

Introduction

Arbitrage is a trading approach that turns market inefficiencies into financial opportunities. There are several types of arbitrage strategies used by crypto traders, including simple arbitrage, cross-border arbitrage, peer-to-peer (P2P) and triangular arbitrage. All of them aim to exploit the price difference in several markets.

Although most arbitrage strategies typically trade two markets, there is a type of arbitrage that uses the difference in price of three asset classes - triangular arbitrage.

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