Why Is Triangular Arbitrage Considered Less Risky than Cross-Exchange Arbitrage?

Triangular arbitrage occurs on a single exchange, eliminating the significant risks associated with moving funds between different exchanges. This removes counterparty risk from multiple exchanges and the execution risk from slow fund transfers.

The execution is typically atomic, meaning all three trades happen almost simultaneously or not at all. This minimizes the risk of the opportunity vanishing during the transaction process.