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.
Glossar
Hft Crypto Arbitrage
Arbitrage ⎊ Hft Crypto Arbitrage involves the high-frequency execution of trades designed to profit from momentary price discrepancies for the same asset or related derivatives across different cryptocurrency exchanges or trading pairs.
Price Discrepancies
Detection ⎊ Identifying these variances involves continuous, high-frequency comparison of asset prices, implied volatilities, or funding rates across different exchanges or derivative contracts.