# What Is the Necessary Condition for a Profitable Arbitrage Opportunity to Exist? ⎊ Path

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

---

## What Is the Necessary Condition for a Profitable Arbitrage Opportunity to Exist?

A profitable arbitrage opportunity requires a significant price discrepancy for the same asset across two or more markets, such that the profit generated from the simultaneous trades exceeds the total transaction costs, including gas fees and slippage. If the price difference is too small, the transaction costs will consume any potential profit, rendering the arbitrage non-viable.

- [What Is the Difference between Gas Limit and Gas Price?](https://learn.greeks.live/path/what-is-the-difference-between-gas-limit-and-gas-price/)

- [How Does the “Gas Price” Differ from the “Gas Limit” in Ethereum?](https://learn.greeks.live/path/how-does-the-gas-price-differ-from-the-gas-limit-in-ethereum/)

- [How Do Transaction Fees (Gas Costs) Affect the Profitability of These Arbitrage Opportunities?](https://learn.greeks.live/path/how-do-transaction-fees-gas-costs-affect-the-profitability-of-these-arbitrage-opportunities/)

- [How Does the Fee Structure of an AMM Impact the Viability of Arbitrage?](https://learn.greeks.live/path/how-does-the-fee-structure-of-an-amm-impact-the-viability-of-arbitrage/)

- [Why Is the Price Difference between the Pool and External Exchanges Necessary for Arbitrage to Occur?](https://learn.greeks.live/path/why-is-the-price-difference-between-the-pool-and-external-exchanges-necessary-for-arbitrage-to-occur/)

- [What Is the Significance of the ‘Spread’ in Arbitrage Trading?](https://learn.greeks.live/path/what-is-the-significance-of-the-spread-in-arbitrage-trading/)

- [How Does the Cost of Execution Impact the Viability of an Arbitrage Opportunity?](https://learn.greeks.live/path/how-does-the-cost-of-execution-impact-the-viability-of-an-arbitrage-opportunity/)

- [What Is a Triangular Arbitrage Strategy in Cryptocurrency?](https://learn.greeks.live/path/what-is-a-triangular-arbitrage-strategy-in-cryptocurrency/)

## Glossar

### [Profitable Option Trade](https://learn.greeks.live/area/profitable-option-trade/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Leverage ⎊ A profitable option trade within cryptocurrency markets necessitates precise leverage application, balancing amplified returns against heightened exposure to volatility inherent in digital asset pricing.

### [Opportunity Costs of Mining](https://learn.greeks.live/area/opportunity-costs-of-mining/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Tradeoff ⎊ The Opportunity Costs of Mining represent the foregone value from deploying capital, energy, and physical space toward cryptocurrency mining instead of the next most profitable or socially beneficial alternative use.

### [Parity Condition](https://learn.greeks.live/area/parity-condition/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Principle ⎊ The Parity Condition, most famously embodied by the Put-Call Parity theorem, establishes a fundamental, no-arbitrage relationship between the prices of a European call option, a European put option, the underlying asset, and a risk-free bond.

### [Calculating Opportunity Cost](https://learn.greeks.live/area/calculating-opportunity-cost/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Cost ⎊ The calculation of opportunity cost in derivatives involves quantifying the forgone return from an alternative deployment of capital, such as holding spot cryptocurrency versus entering a futures contract.

### [Profitable Option Buying](https://learn.greeks.live/area/profitable-option-buying/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Benefit ⎊ The primary advantage of profitable option buying is the ability to gain leveraged exposure to favorable price movements in a cryptocurrency with a known, capped maximum loss equal to the premium paid.

### [Determining Profitable Lifespan](https://learn.greeks.live/area/determining-profitable-lifespan/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Horizon ⎊ Determining the profitable lifespan establishes the finite time horizon over which a mining asset is expected to generate positive net revenue.

### [Profitable Griefing Attacks](https://learn.greeks.live/area/profitable-griefing-attacks/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Exploit ⎊ Profitable Griefing Attacks describe a class of malicious on-chain activity where an attacker executes a sequence of transactions specifically designed to inflict disproportionate financial damage upon a target while securing a net positive return for themselves.

### [Profitable Volatility Plays](https://learn.greeks.live/area/profitable-volatility-plays/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Strategy ⎊ Profitable volatility plays involve implementing options strategies designed to capitalize on changes in implied volatility, rather than predicting the direction of the underlying asset's price movement.

### [Pre Condition Usage](https://learn.greeks.live/area/pre-condition-usage/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Condition ⎊ Pre Condition Usage involves formally specifying the exact condition that must hold true for the contract state and input parameters immediately prior to the execution of a critical financial function.

### [Execution Halting Condition](https://learn.greeks.live/area/execution-halting-condition/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Condition ⎊ An Execution Halting Condition is any state or instruction encountered during smart contract processing that forces the Ethereum Virtual Machine (EVM) to immediately cease further computation of the transaction.

## Discover More

### [Under What Condition Is Early Exercise of an an American Call Option Rational?](https://learn.greeks.live/path/under-what-condition-is-early-exercise-of-an-an-american-call-option-rational/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Under What Condition Is Early Exercise of an an American Call Option Rational?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetrical-Digital-Asset-Custody-Apparatus-Encapsulating-Hedging-Instrument-Portfolio-Mechanics.webp)

Early exercise of a call is rational only to capture a large dividend or fork that is greater than the option's remaining time value.

### [How Do Oracles Provide Necessary Data for Decentralized Options Pricing?](https://learn.greeks.live/path/how-do-oracles-provide-necessary-data-for-decentralized-options-pricing/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do Oracles Provide Necessary Data for Decentralized Options Pricing?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Crosshair-Mechanism-Illustrating-Volatility-Skew-and-Derivative-Pricing-Convergence.webp)

Decentralized data feeds provide real-time, tamper-proof spot price and implied volatility data to the options protocol's pricing mechanism.

### [What Legal Remedies Exist When an Immutable Smart Contract Executes Incorrectly?](https://learn.greeks.live/path/what-legal-remedies-exist-when-an-immutable-smart-contract-executes-incorrectly/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Legal Remedies Exist When an Immutable Smart Contract Executes Incorrectly?](https://learn.greeks.live/wp-content/uploads/2025/10/Concrete-Truss-Structure-Intersecting-Spherical-Boundaries-Within-Decentralized-Finance-Mechanism-Rendering.webp)

Remedies shift from code reversal to seeking external monetary damages against the responsible party for loss.

### [Why Is a High Degree of Centralization Often Necessary during a Project's Bootstrap Phase?](https://learn.greeks.live/path/why-is-a-high-degree-of-centralization-often-necessary-during-a-projects-bootstrap-phase/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is a High Degree of Centralization Often Necessary during a Project's Bootstrap Phase?](https://learn.greeks.live/wp-content/uploads/2025/10/Dual-Hypergeometric-Distribution-Engines-Mirroring-Decoupled-Perpetual-Futures-Settlement-Mechanisms.webp)

Centralization enables speed, efficiency, and rapid bug fixes in early-stage code, which is essential before the protocol is mature and secure.

### [Why Is the Price Difference between the Pool and External Exchanges Necessary for Arbitrage to Occur?](https://learn.greeks.live/path/why-is-the-price-difference-between-the-pool-and-external-exchanges-necessary-for-arbitrage-to-occur/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is the Price Difference between the Pool and External Exchanges Necessary for Arbitrage to Occur?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Autonomous-Organization-Governance-Token-Volatility-Surface-Visualized-Through-Analog-Compass-Metaphor.webp)

The price difference creates a risk-free profit opportunity that must exceed transaction costs for arbitrage to be viable.

### [In Which Market Condition Is the Difference between the Two Spreads Most Significant?](https://learn.greeks.live/path/in-which-market-condition-is-the-difference-between-the-two-spreads-most-significant/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![In Which Market Condition Is the Difference between the Two Spreads Most Significant?](https://learn.greeks.live/wp-content/uploads/2025/10/Illuminated-Liquidity-Barometer-Displaying-Realized-Volatility-Metrics-Across-Digital-Asset-Instruments.webp)

In highly liquid markets with strong competition, where market makers frequently offer price improvement inside the quote.

### [What Is the Maximum Hashrate Percentage a Miner Can Have before Selfish Mining Becomes Consistently Profitable?](https://learn.greeks.live/path/what-is-the-maximum-hashrate-percentage-a-miner-can-have-before-selfish-mining-becomes-consistently-profitable/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Maximum Hashrate Percentage a Miner Can Have before Selfish Mining Becomes Consistently Profitable?](https://learn.greeks.live/wp-content/uploads/2025/10/Hard-Disk-Platter-Data-Access-Spindle-Metaphor-for-Decentralized-Finance-Derivative-Execution-Speed.webp)

Selfish mining is generally considered consistently profitable when a miner controls approximately 33% of the total network hashrate.

### [What Technological Solutions Exist for VASPs to Securely Transmit Travel Rule Data?](https://learn.greeks.live/path/what-technological-solutions-exist-for-vasps-to-securely-transmit-travel-rule-data/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Technological Solutions Exist for VASPs to Securely Transmit Travel Rule Data?](https://learn.greeks.live/wp-content/uploads/2025/10/Advanced-Cryptographic-Hardware-Wallet-Deployment-Mechanism-Featuring-Retractable-Stabilizer-Fins-and-Internal-State-Machine-Components.webp)

TRIS solutions use encrypted peer-to-peer channels to automate the secure exchange of PII and VASP verification, ensuring both compliance and data security.

### [How Does a Trader's Order Size Relate to the Necessary Slippage Tolerance?](https://learn.greeks.live/path/how-does-a-traders-order-size-relate-to-the-necessary-slippage-tolerance/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Trader's Order Size Relate to the Necessary Slippage Tolerance?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Actuator-Apex-Stabilizing-Exotic-Digital-Asset-Hedging-Instrument-Mechanism.webp)

Larger orders cause greater price impact, necessitating a higher slippage tolerance to ensure successful transaction execution.

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---

**Original URL:** https://learn.greeks.live/learn/what-is-the-necessary-condition-for-a-profitable-arbitrage-opportunity-to-exist/
