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Y O U R D I G I T A L D N A       2015      



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Arbitrage Trading

What is Arbitrage Technology?
Arbitrage is the simultaneous purchase and sale of an asset to profit from a difference in the price. It is a trade that profits by exploiting the price differences of identical or similar financial instruments on different markets or in different forms.

Arbitrage in Bitcoin is the technique of investing in two assets (going long one and short the other) and assuming that the prices will converge over time. This is made possible as a result of market inefficiencies, although as technology advances more and more these inefficiencies are likely to be smaller and to be eliminated faster.
True arbitrage is meant to be risk-free profit but in reality, it very very rarely is. Due to the fact that any profit from arbitrage is likely to be small, traders and investors will put in vast amounts of money to magnify returns.
The most famous example of arbitrage is that of Long-Term Capital Management, the quant-based hedge fund which started off selling new US government bonds and buying older ones, and taking the profits as the prices converged. Hedge funds which operate an event driven strategy will often work on the basis of merger arbitrage, i.e. that the stock prices of companies will converge if they complete a merger deal.

Arbitrage Opportunities for Cryptocurrencies
There are many different markets for the wide variety of crypto-coins. Any given asset (coin) will be offered at different prices across these markets. Clear opportunities for Arbitrage( taking advantage of a price difference between markets )...

Arbitrage Technology has never been simple, but cryptocurrency has added a whole new layer of complexity.
Whereas before one mostly needed to consider varying deposit/withdrawal fees and times, traders now have to be aware of what version of coins protocol an exchange is running find out what can happen when a cryptocurrency being traded forks or, in this case, creates a new blockchain altogether.

Arbitrage Trading

How to make Money with Arbitrage Technology and Bots... Try Cryptocompare 

Arbitrage is a way to earn profit from the difference in price between two markets. Usually, large exchanges have a lot of members or traders who can react quickly to any news related to their market. It is called ‘liquidity’ because, on such exchanges, any asset can be turned into cash and cash into an asset. There is always someone on this exchange who is waiting for an offer and is ready to deal. Well, not always, but often. There are also fewer liquid exchanges where there are fewer traders and at times, when you try to sell or buy an asset there, you need to wait for someone to accept your offer and approve the transaction. We all know the old saying that time means money.
If you are required to wait too long, you may lose some of your profit. That’s why there is a demand for Arbitrage.
For instance, Bitcoin prices have been growing for a few hours due to some positive news. People decide that cryptocurrencies has a bright future and decide to invest their money into this cryptocurrency. Usually, they go to the most popular and famous Bitcoin exchange platforms like BitStamp. There is already enough liquidity in this exchange and these people help increase that. Consequently, the prices tend to change and increase rapidly or fall very low. At the same time, less liquid Bitcoin exchange platforms, with fewer members and traders, are also growing (or decreasing), but not as fast and this is the key point. In a few hours or minutes, there appears a spread. For example, a liquid exchange has a price $350 per BTC, while a non-liquid exchange has at $335 per BTC at the same moment. Here is an opportunity for an arbitrage. It is going to be $15.

Sample by 99Bitcoins

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