Arbitrage

A trading strategy which involves buying from one market or platform at a set price and selling at a different market or platform at a higher price.

Arbitrage is a common trading strategy that involves matching the trading prices of a commodity across two or more markets or platforms, and capitalizing on the marginal or massive differences in price. The result of this strategy is a little or a lot of profit to be had from simply buying and selling the same commodity without having to change the commodity in any way. Thus, a trader uses arbitrage when they buy cryptocurrency X from market A and sell it sometime after at a different market B, thereby earning a profit from the difference in prices.

The arbitrage strategy relies entirely on price differences in commodity sales as a result of varying prevailing economic conditions. Smart crypto traders turn profits by keeping a bird’s-eye view of multiple markets and often hurriedly buying and selling cryptos.