Among traders like you, you must be familiar with arbitrage. Unfortunately, a lot of traders do it the wrong way. As a result, there is no profit but even a loss. This time we will discuss the correct way of arbitrage in the world of digital asset trading.
what is arbitrage?
According to the KBBI, the word arbitrage has the following meanings: n The simultaneous buying and selling of the same goods in two or more markets with the hope of making a profit from the difference in price.
In practice, this in itself is a way in which traders try to profit from the price difference between digital assets in two different markets. This can happen because not all digital assets have the ‘exact same’ price in every location or market.
It sounds quite simple, but a lot of traders do it the wrong way.
For example, you are a member of 2 platforms for buying and selling bitcoin, let’s say the first platform is A and the second is INDODAX.
At one time, you saw the selling price of bitcoin on Indodax at IDR 155,000,000 and the selling price of bitcoin on platform A at IDR 150,000,000.On the occasion of this price dispute, you immediately buy bitcoins on platform A and transfer the bitcoins to INDODAX.
Then, you immediately sell the bitcoins on INDODAX. Well, the usual hurdle for arbitrageurs like you is processing time.
The process of buying and selling digital assets takes time, although it doesn’t take very long, but in that time, the price of digital assets may have changed up or down.