THE ULTIMATE ARBITRAGE GUIDE!

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I guess you might have landed on this page while researching about Arbitrage guide to find out more kindly go through the guide below.

In this article i will be revealing to you though not everything you need to Know about Arbitrage but a tip of the iceberg.

LET'S GET STARTED 

Crypto arbitrage is the fast lane to making huge profits! 💸

I spent months working on arbitrage and coding smart contracts. 📘

Here are 4 arbitrage strategies (simple and complex) you can use to make earnings. 💰

WHAT'S ARBITRAGE?

Arbitrage involves taking advantage of the price difference between two exchanges (centralized or decentralized). The idea is to buy where the price is low and sell where the price is high. The more volatile the market, the more opportunities there are.

HOW DOES ARBITRAGE WORK?

Arbitrage is the technique of gaining small profits by purchasing and selling shares on separate markets or exchanges at the same time. A spread is a difference in price between two markets or exchanges for a particular security, currency, or commodity; it is also known as the arbitrageur's profit.

While arbitrageurs attempt to profit on market incompetence, they end up identifying pricing flaws for a certain stock. Markets actually improve as a result of this. As a result, as soon as the market improves, the arbitrageurs' profitability ends.

TYPES OF ARBITRAGE

The table below talks about the different types of arbitrage:

1) Pure Arbitrage:

The arbitrageur makes a buy or sells decision right away, without having to wait for funds to clear.

2) Retail Arbitrage:

This is a popular e-commerce activity. Arbitrageurs buy a product at a low price from a local merchant and then offer it for a high price on an e-commerce website.

3) Risk Arbitrage:

Investors frequently forecast a stock's price rise and, as a result, buy and hold the stock. In other words, investors are anticipating a price increase in another market.

4) Convertible Arbitrage:

Arbitrageurs profit from holding a long position in convertible securities while simultaneously shorting the underlying stock.

5) Merger Arbitrage:

This is a tactical endeavor. When arbitrageurs suspect an acquisition or merger, they purchase the target company's stock. They sell the shares when the prices rise after the merger.

6) Dividend Arbitrage:

Traders that use this strategy buy stocks immediately before the ex-dividend date. The ex-dividend date is the deadline for completing the purchase of the underlying stock by the investor. He is only then entitled to the payout on the specified date.

7) Futures Arbitrage:

The stock is bought with cash and then sold in the futures market. Futures are usually priced higher than cash to account for the future premium. On expiry, however, both prices converge, giving the trader an arbitrage profit.

During the Terra and FTX crises, I made incredible gains using these arbitrage strategies. 

They are effective in periods when the market is disrupted, whether it's going up or down.

Here are 4 strategies explained (the last one is the best). 👇

Strategy 1:

This is the simplest strategy, which involves taking advantage of price differences between different DEXs. 

To keep it simple, this research is done manually. You can use @dexscreener (twitter) to manually scan prices and find differences between DEXs.

If the price difference is significant, you can buy for example $WBTC on DEX A and sell it on DEX B. 

You can even do it on different blockchains (buy on #Ethereum and sell on #Polygon). Be cautious of gas fees in this case.

Under normal circumstances, you won't make profits with this strategy because it is too manual. 

But during times of volatility (significant price fluctuations, FUD, major issues, etc.), you can make gains with this simple strategy! I've done it before!

Strategy 2:

The second strategy is similar to the first one, you do it on CEXs. 

You can use @CoinMarketCap (twitter) to scan crypto prices on different exchanges and find differences. 

Interact only with CEXs that have a HIGH confidence level.

You need to: 👇

You will find more opportunities on CEXs than DEXs, but it's slightly riskier on CEXs. 

Many CEXs are scams and freeze users' funds. That's why you should only interact with CEXs marked as HIGH confidence on Coinmarketcap.

Strategy 3:

Strategy 3 is the same as Strategy 2, only you’ll use an arbitrage bot. 

Arbitrage bots scan crypto prices on different CEXs, and once an opportunity is found, they automatically perform the buying and selling operations.

There are numerous platforms that offer such services, usually for a fee. 

Here are some informative examples, but you can find others by searching on your own:

- @pionex_com

- @cryptohopper

- @CoinRuleHQ

Personally, I'm not a fan of this strategy because:

- It is not decentralized.

- Bots don't monitor all exchanges; they only cover a few.

However, I know people who have made money using this type of bot.

Let’s see the strategy I recommend you to perform!

Strategy 4 :

For me, this is the best way to do arbitrage, it's the one I've been using for a while. 

This strategy involves automatically taking advantage of price differences between two DEXs using smart contracts!

This strategy is not simple, but it's the most effective way to capitalize on arbitrage opportunities. 

A smart contract acts as an arbitrage bot for DEXs. You have complete control over what your smart contract does, and it's entirely decentralized.

You don't need to be highly skilled in Solidity to launch your first arbitrage smart contract. 

With some work and a basic understanding of Solidity, you can launch your first arbitrage contract within a few weeks.