A new arbitration possibility is the so-called input and output is performed in the same exchange. More specifically, although it is bought and sold simultaneously on two exchanges as in the scenario above, this operation is always followed by a complimentary one, of sale and purchase at the same time. Assuming that the movement of the pair on the two aforementioned exchanges is not perfectly synchronous, there are times when that difference is small and times when it is large. With the immediateedge bot this is the best deal that you can now have.
The Right Bet
The bet, in this case, is that the difference movement will be cyclical. A very simple algorithm is, for example, buying and selling when the difference is below the 5th percentile of the distribution of possible values and selling or buying when the difference is above the 95th percentile. In this case, it must be analyzed whether this difference exceeds trading fees and related risks, but it is no longer necessary to run the money between exchanges actions that come with additional costs.
The Different Types
These types of arbitrage are an example of simple market-neutral strategies, in which profits and losses are not affected by the global price movement relative to the base currency, ETH in example, but only by the evolution of the price difference. As expected, since it is quite easy to build such algorithms and the risks are relatively small, the market is quite crowded, and the more algorithms …