How Is Triangular Arbitrage Different from Futures-Spot Arbitrage?
Triangular arbitrage involves exploiting a price discrepancy among three different currencies or assets in three different markets to make a riskless profit. Futures-spot arbitrage involves exploiting a discrepancy between the price of a futures contract and its underlying spot asset, typically in the same market.
Glossar
Arbitrage Exploitation Risks
Exposure ⎊ Arbitrage exploitation risks within cryptocurrency derivatives, options trading, and financial derivatives stem from the inherent informational asymmetry and rapid price discovery characteristic of these markets.
Expiration Date Arbitrage
Principle ⎊ Expiration Date Arbitrage exploits temporary pricing discrepancies between derivative contracts, such as options or futures, that share the same underlying asset but possess different expiration dates.
Volatility Arbitrage Concepts
Concept ⎊ Volatility Arbitrage Concepts revolve around the idea of profiting from the difference between an option's implied volatility and the trader's forecast of the underlying asset's future realized volatility.
Long Short Arbitrage
Strategy ⎊ Long Short Arbitrage is a market-neutral trading strategy that capitalizes on transient pricing inefficiencies between highly correlated crypto assets or derivatives, such as a spot token and its perpetual future.
Regulatory Arbitrage Mining
Strategy ⎊ Regulatory Arbitrage Mining is the strategic practice of establishing cryptocurrency mining operations in jurisdictions specifically chosen to exploit favorable legal, tax, or energy policy environments that offer a competitive advantage over other regions.
Forex Arbitrage Concepts
Arbitrage ⎊ This concept involves exploiting momentary, risk-free profit opportunities arising from price discrepancies for the same asset across different markets or instruments, such as between a crypto spot market and its corresponding futures contract.
Riskless Profit Opportunities
Arbitrage ⎊ Riskless Profit Opportunities are fundamentally a form of pure Arbitrage, exploiting temporary mispricings between highly correlated assets, such as a spot crypto asset and its perpetual future or option contract.
Unwinding Arbitrage Positions
Unwinding ⎊ Unwinding arbitrage positions involves closing out a basis trade by simultaneously liquidating the long and short components of the strategy.
Arbitrage Calculation
Formula ⎊ Arbitrage Calculation quantifies the theoretical risk-free profit achievable from mispricings across related financial instruments.
Financial Arbitrage in Crypto
Arbitrage ⎊ Financial arbitrage in crypto involves the simultaneous purchase and sale of an asset or related financial instruments across different markets to profit from a temporary price differential.