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🔄 Cross-Exchange Arbitrage

Buy low on one exchange, sell high on another

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🔄 Cross-Exchange Arbitrage

Cross-exchange arbitrage involves buying an asset on one exchange where it's cheaper and selling it on another where it's more expensive. It's the most straightforward arbitrage strategy.

🎮 Interactive: Arbitrage Profit Calculator

Calculate your potential profit from cross-exchange arbitrage:

Per BTC
$35,000$45,000
Per BTC
$35,000$45,000
0.1 BTC5 BTC
$5$100

Calculation Breakdown

Buy Cost (Exchange A):$40,040.00
1 BTC × $40,000 + 0.1% fee
Sell Revenue (Exchange B):$40,159.80
1 BTC × $40,200 - 0.1% fee
Withdrawal Fee:-$25
Net Profit:$94.80
Return on Investment:0.24%
Profitability Status
✅ Profitable Trade

The Execution Process

🔍
Step 1
Identify Opportunity
Monitor prices across exchanges to find spreads
💰
Step 2
Execute Buy Order
Buy asset on cheaper exchange (Exchange A)
🔄
Step 3
Transfer Asset
Withdraw and deposit to expensive exchange (Exchange B)
📈
Step 4
Execute Sell Order
Sell asset for profit, accounting for all fees

Real-World Example

🏦

BTC Arbitrage: Binance → Coinbase (March 2024)

Binance Price:$42,150
Coinbase Price:$42,380
Spread:$230 (0.55%)
Trade Size:2 BTC
Trading Fees (0.1% each):-$169
Withdrawal Fee:-$25
Transfer Time:~15 minutes
Net Profit:$266 (0.31% return)
⚠️ Risk Note
During the 15-minute transfer, BTC price could move. If Coinbase price drops below $42,150, the arbitrage becomes unprofitable. Professional arbitrageurs hedge this risk using derivatives.

Key Challenges

⏱️

Time Sensitivity

Arbitrage windows close quickly. By the time you transfer funds between exchanges (10-30 minutes), prices may have equalized or reversed.

Solution: Keep funds on multiple exchanges, use fast withdrawal chains (TRC-20, Polygon)
💸

Fees Eating Profits

Trading fees (0.1-0.5%), withdrawal fees ($10-50), and network fees can consume most or all of your spread, especially on small trades.

Solution: Only trade when spread exceeds 0.5%, use VIP tiers for lower fees
🔒

Capital Requirements

You need capital on both exchanges to execute trades quickly. Small spreads require larger position sizes to generate meaningful profits.

Solution: Start with $5,000-10,000 split across 2-3 exchanges
📉

Price Movement Risk

During transfer time, volatile price movements can turn profitable trades into losses. High volatility increases this risk.

Solution: Hedge with futures, use stablecoins for transfers when possible
💡

Pro Tips for Cross-Exchange Arbitrage

  • •Monitor Korean exchanges: Korean "kimchi premium" often creates 1-5% arbitrage opportunities
  • •Use API trading bots: Manual execution is too slow; bots can monitor 20+ exchanges simultaneously
  • •Factor in withdrawal times: Some exchanges delay withdrawals during high volatility
  • •Consider tax implications: Each trade is a taxable event in most jurisdictions