Moving brick arbitrage hedge trading strategy

In the capital market, there are no philanthropists, only winners and losers. In the market, winning and losing is the only standard, except that it is nonsense. It is better to rely on strength than to rely on strength, and speculative speculation is not as good as arbitrage.

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Some people say that the currency circle is the money that the elderly make new people. In fact, they always understand the money that people are confusing. In the blockchain, as long as you participate in the currency circle, it is the currency circle. The currency circle is of course for the purpose of earning money, especially in the capital market, there is no philanthropist, only winners and losers. The coin who won't win money is just a waste! No matter how successful you are in other aspects, in the market, winning and losing is the only standard, and besides, it is nonsense. It is better to rely on strength than to rely on strength, and speculative speculation is not as good as arbitrage.



What is digital currency moving brick arbitrage


Arbitrage can be defined as buying an asset in a different market and selling it in another market at a higher price, as the saying goes, selling high and buying low. In digital currency arbitrage, you can search and compare digital currency prices in different exchanges. Then you buy from cheaper exchanges and sell on higher-priced exchanges. Then you will get the price difference as your profit. Arbitrage has existed in the foreign exchange market for a long time, but due to the large-scale development of quantitative systems, arbitrage has not been realized. However, digital currency arbitrage may be due to the rapid increase in trading volume and the inefficiency of exchanges resulting in price differences. In most cases, large exchanges with high volume will direct the price of the digital currency of the smaller exchange with less trading volume. However, the price of the exchange always changes. This is where digital currency arbitrage becomes possible.


Principle of arbitrage


There are many global digital currency exchanges, and the market is not always effective for the same currency. The same time, the same transaction has a price difference between two or more exchanges, as long as there is a spread, there is arbitrage space. Arbitrage through spreads is basically risk free in the digital currency market.


Suppose the EOS/USDT transaction pair: the price of the coin is 11, the price of the coin is 10, and the EOS has a difference of 1 USD between the two exchanges. Suppose you hold 1 EOS in the fire currency, follow the principle of high buy and low buy, sell 1 EOS in the fire coin to get 11 USDT, buy 1 EOS in the currency to spend 10 USDT, buy one and sell net earned 1 USDT, the amount of EOS remains unchanged. Although there is such a price difference, manual arbitrage often has many uncertainties due to the time-consuming, poor accuracy and price changes of manual operations. Through the quantitative model to capture arbitrage opportunities and develop arbitrage trading strategies, and programmatic algorithms automatically release trading orders to the exchange, quickly and accurately capture opportunities, and efficiently earn income, which is the charm of quantitative arbitrage.


Arbitrage preparation


High-priced market has base currency, or low-priced market has denominated currency, or recharge to buy base currency in low-price market; and need to open accounts on two exchanges at the same time; low-price market supports the arbitrage of the base currency to withdraw money request; high price The market supports the arbitrage of the denominated currency to withdraw money requests, or can be withdrawn to the legal currency.


Precautions


In order to carry out the spread arbitrage, you should consider:


A. Exchange fee


B. Does the coin support and the cost of the coin


C. Miner network fee


D. Time spent transferring digital currency from one exchange to another


If all of these options show that you can make a profit through arbitrage, you can proceed with the transaction. Remember that arbitrage depends largely on time, so it is not a permanent opportunity to make a profit. If your transaction requires a lot of time to confirm, the price may change and affect the risk.


Risk problem


Hard to earn tired body is also tired, maybe you are operating or waiting for the currency market has passed, easy to produce losses, remember that the first key to arbitrage is to be the ultimate fast.


Hedging arbitrage across the market (focus on repeated reading)


The two-corner arbitrage is also called direct arbitrage bilateral arbitrage. It is through the discovery that the same transaction pair (such as: EOS/USDT) has a price difference relationship between two different exchanges, and the behavior of high-selling and low-buy is to take the difference profit. The amount of hedged profit and loss is equal, and the same base currency is bought and sold in both markets to ensure that it is transferred to the currency of the valuation. It is through the discovery that the same transaction pair (such as: EOS/USDT) has a price difference relationship between two different exchanges, and conducts high-selling and low-buy to take the difference profit. The hedging is a combination of profit and loss, the same amount, and in both markets, buy and sell the same amount of the base currency EOS, thereby earning the USDT of the denomination currency, ensuring that the hedging transactions (EOS/USDT) on the two exchanges buy or The number of shares sold is equal.


Assume that the exchange Huobi and OKEX transactions have an EOS/USDT price of 1, 2, and there is an arbitrage opportunity for the spread (simplified handling fee is not considered), 5 in the OKEX EOS balance and 10 in the Huobi USDT. Introduce the hedging idea, each time the amount of IOS is hedged, and follow the principle of high buy and low buy.


Cross-market arbitrage


Assume that the exchange OKEX and Huobi transactions have an EOS/USDT price of 10 and 5 respectively, and there is an arbitrage opportunity for the spread. Following the principle of high buy and low buy, first assume that the user has 10 EOS in OKEX, regardless of transaction cost, sell 10 EOS on OKEX to get 10 USDT, and USDT to transfer money or transfer (Finance can only be transferred, denominated The virtual currency can be raised to Huobi, and all EOS is bought, and 10 EOSs are obtained. After completing an arbitrage, 5 EOSs have been added, and the USDT has not changed. If the spread has been there, the arbitrage can be continued. If the joining user does not have a balance on the two exchanges, they can first deposit into the CNY at OKEX to conduct the above transaction.


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