Simply put, this is when an asset is simultaneously bought and sold in two markets — often because they are being sold at slightly different prices.
As an example, shares in a technology company might be on sale for $35 on the New York Stock Exchange, but available for $35.10 in London. Sure, the difference is small — but speedily bulk buying the shares at the lower price and selling them for a higher price can result in a tidy profit for an eagle-eyed trader. This concept captures the very essence of arbitrage, and it is risk-free when compared with other strategies.
Arbitrage can work across a range of financial instruments beyond stocks — bringing us very nicely up to our next point - Crypto Arbitrage.
Crypto arbitrage is when someone buys crypto currency for a low price and then sells it for a bigger price at another exchange. There are countless exchanges around the world now offering consumers the chance to purchase crypto. But here's the thing: There can be significant differences in the prices on offer for digital currencies such as Bitcoin, Ethereum or others.
For example, such inefficiencies normally arise in regions where crypto is in high demand. One of the most often-quoted examples is the “Kimchi Premium.” Here, local traders in South Korea ended up paying more for Bitcoin in terms of USD than they would have done in the United States, Europe and even other parts of Asia.
Because we have an investor team with so much experience, we have found a lot of partners who are letting us transfer money faster that it would usually take between bank and exchanges, hence we can generate bigger profits and be risk-free.