How Do High-Frequency Trading (HFT) Bots Enable Crypto Arbitrage?
HFT bots are automated programs designed to execute trades at extremely high speeds, often within milliseconds. This speed is critical for arbitrage, as price discrepancies are fleeting.
The bots constantly monitor multiple exchanges and trading pairs for opportunities. They can place and cancel orders rapidly, allowing them to capitalize on tiny, short-lived inefficiencies.
HFT is essential for exploiting low-latency arbitrage.