So, I was checking out this article about doing arbitrage on Bitmex, specifically between buying on the spot and selling futures. The whole process seems pretty straightforward:
You just need to spot a difference between the spot price and the futures price.
You buy a certain amount of BTC on the exchange.
Then, you sell that amount plus the difference.
When the settlement date rolls around, you get that difference no matter what happens (plus your original balance).
But I've run some calculations and honestly, I can't see the arbitrage working out. If the price spikes, you could end up losing everything because of margin calls.
Am I missing something here? Appreciate any insights!
Arbitrage on Bitmex
5 replies 358 views
vault_bullMember
Posts: 11 · Reputation: 125
#2Sep 13, 2017, 12:32 PM
Arbitrage trading should be profitable due to the difference in price between the exchanges. The basic principle is to buy BTC at one Exchange for a certain price (1200) and transfer to another exchange where BTC is worth more (1250). Once your bitcoin are at the 2nd exchange one transfers to USD and you should be able make the difference. Two problems. One needs high volume to make a good profit and one needs to be quick from 1st step to last. It is not as easy as it sounds.
Arbitration is essentially buying in one market and simultaneously selling elsewhere, benefit from temporary differences. To apply arbitrage in crypto currency trading, the cost and speed of transactions must be taken into consideration because the market price is always changing.
When you are not sure about how the F&O works and how to arbitrate within them, it is highly recommended to stay away. Right now Indian bitcoin markets are ahead of $200 than rest of markets (check here). If you can make use of it, you can earn decently with this arbitrate trading opportunity.
BasedMinerMember
Posts: 1 · Reputation: 71
#5Sep 14, 2017, 01:06 AM
Yea I agree with arbitrage is not one markets only I don't agree with OP, arbitrage on bitmex only although it gives profit that is trading like other trading on markets, talking about arbitrage there is service that gives recomendation about different price between markets, the minimal capital be used for getting profit, we can check on here https://beta.krip.to/ unfortunately this service is still under maintenance.
vault_alphaHero Member
Posts: 363 · Reputation: 2228
#6Sep 14, 2017, 05:52 AM
As much as I don't encourage people to engage in arbitrage trading (not because it is unprofitable), but it's because the dealer could frown at it, and some of them are even using it as a setup against people. Also, it requires a good amount of money before you can make something good out of it (higher risk).
However, if you must do it, you are doing it wrong by dealing with an exchange. It's better done with multiple dealers whose pricing rates vary. You move the money in and out of them based on the variation and your gain difference calculation, simple.
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