What are the best products for arbitrage


Different forms of arbitrage

Arbitrage occurs in various forms in the financial sector, such as so-called triangular arbitrage, space arbitrage or also differential arbitrage. Time arbitrage and currency trading arbitrage are two other types that are more common in practice.

Triangular arbitrage is characterized, for example, by the fact that forex traders often compare so-called cross rates with rates that are set in practice. This allows traders to benefit from possible differences. This happens because a currency is not acquired directly, but the purchase takes place via a third currency. Since three currencies are involved in this arbitrage business, it is also referred to as triangular arbitrage.

The arbitrage in currency trading is of particular importance, because numerous currencies are traded at their rates down to the third or even the fourth decimal place. On the different foreign exchange exchanges, there are almost always the smallest exchange rate differences that make an arbitrage business possible. However, it should also be noted there that very high volumes have to be traded so that a reasonably worthwhile profit can be achieved. This is seldom a problem, especially when trading forex, as the forex brokers often offer leverage between 100: 1 and 400: 1.