Arbitrage trading is a relatively low-risk trading strategy that takes advantage of price differences across markets.

Binance Academy in its beginner article on Arbitrage points to how Arbitrage Trading is a trading strategy where the traders will buy the asset in one market and sell it in another. For instance, the price of Bitcoin technically, should be the same across all exchanges, but in reality there will be some price difference between exchanges.

The skill level of the arbitrageur is expected to be skilled in identifying the price differences.  There are going to be several other arbitrageurs competing.  Therefore, the profit window will close quickly. Arbitrage traders need to have lot of capital to make things work for them and they need to work quickly. However, these traders are low risk and the risk returns are particularly low. It is definitely not zero risk.  There is no risk without reward. And, arbitrage trading is no exception.

Execution risk is one of the biggest risk with arbitrage trading.  The spread between the prices closes before the trade gets finalized.  This will lead to zero or negative returns.

There are different types of arbitrage trading like exchange arbitrage, funding rate arbitrage, and triangular arbitrage. Those who want to learn more should visit the Academy.

Community response:  Exchange arbitrage seems next to impossible with many coins having enormous fees, slow transfer rates or both. So I guess you’d need to fund two exchanges and buy on one and hope to sell on another.

Yeah, but doing it right is a whole different story. Especially. If you have to consider taxes and liquidity.

Meanwhile CZ Binance expressed:  There is so much more to build.  Focus on the long term.  Business communication tip: distill your message to the most important points, and say it in the most concise manner possible. Makes everything so much easier.  The industry is growing.

Community response:  Yes. That’s why we are testing three products at the same time and the front-end implementation is going on. Plus more products in design phase there’s such much to build Sir.

Yes. This is just the start. 2 years ago it was a vision. We have a great team ready to conquer the world. Good luck to all projects.

The crypto world holds more surprises than we have already seen.  And, so much adoption to come. People buy into promises over accomplishments.  NFTs and crypto games have catalyzed a lot of the growth we’re seeing today.