Thursday, March 22, 2018

Earned $1900 Clicking Here and There

How?

Arbitrage.

"F*** off GMGH, arbitrage doesn't exist in this day and age!"


Oh ho ho, but yes, it does.

I sold crypto on one exchange which had people willing to buy at a higher price.
I bought back the crypto immediately at another market by people there willing to sell at a lower price.
I end up with more crypto than I started out with. That difference is worth $1,900 if I cash it out now.


The crypto markets are so extremely inefficient in so many ways.

There are sooooooooo many opportunities, it's just a question if the situation, abilities and resources you have is the right fit to take advantage of them.

In my case, my resources was simply:
1) Being familiar and having accounts with the 2 exchanges
2) Having liquidity in both the crypto of the pair that I wanted to arbitrage

I sent my crypto to sell high on one exchange.
I sent my crypto to buy back low on the other exchange.

Click sell.
Click buy.

Boom.

1 second later, I am $1,900 richer.


In case you don't realize, arbitrage is risk-free (save for the low binary 3rd party risks with the exchanges).

Risk-free money sounds good eh? Well, only if you know how to do it right.

A lot of people can screw up arbitrage by not having liquidity and being greedy. Instead of instantly buying and selling to remove any risk of price slippage, they will buy from one exchange, transfer it to another exchange, and hope and pray that price doesn't change between the time it takes to process both the withdrawal from the first exchange and the deposit on the second exchange.

Luv, that ain't arbitrage. That's buying now and hoping to sell at a profit 30 minutes later. It is NOT risk-free.

If you don't execute the buy and sell almost instantly on both exchanges, it's not called arbitrage.

So anyway, there you go, arbitrage 101 class for you. Tip me when you get rich, thanks.

For those interested, arbitrage on some crypto pairs between illiquid exchanges can run as high as 20%, but I normally don't bother unless it's at least 5%, with enough market depth to make it worth my time.

The $1,900 today sure was worth my time though.

Overvalued scam ponzi tulip shit apparently. But $1,900 worth of it.

3 comments:

  1. Hi,

    So you will need to have the coins on both exchanges to effectively perform a risk free arb?

    ReplyDelete
  2. Hi, can you share which are the 2 exchange did you use for arbitrage? Thank you

    ReplyDelete

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