Spreads algorithm was designed to assist arbitrage traders in making an educated decision by displaying the historical price differences between a pair across multiple exchanges.
The tool has become popular among arbitrage traders looking to increase the overall value of their portfolio rather than total coin volume. Value traders prioritize fiat growth over increasing the quantity of the total coin. Most value trading is performed manually by buying a coin with fiat on exchange A and moving it to exchange B in an attempt to sell it for fiat before tracking down another arbitrage opportunity.
Arbitrage spreads can easily scan the historic database and populate custom reports, enabling any trader to take notes of historic price gaps, while utilizing the data in planning the future wallet rebalancing strategy as well as the new arbitrage path.
For the arbitrage traders looking to grow the overall coin portfolio, picking an automated trading solution might be also efficient. All too often, however buying a coin on exchange A and simultaneously selling on exchange B isn’t always an option due to the fact that a coin not always being immediately available for trading and may require prior wallet rebalancing.
For instance: If Joe has decided to take advantage of (simultaneous buying/selling) 3% BTC/USD arbitrage opportunity between Binance and Exmo, he would need to have USD available on Binance and Bitcoin on EXMO. In that case, an automated algorithm would perform an action to buy a Bitcoin with USD on Binance, and simultaneous action to sell a Bitcoin for USD on Exmo. However, if Bitcoin wasn’t immediately available for selling, the automated transaction would not take place.
In most cases, the automated & commercially available arbitrage solutions existing today would still require some degree of manual involvement. Whether you’re planning a manual triangular arbitrage path, or setting up a plan for rebalancing wallets for series of automated arbitrage trades, the spreads data library will assist you in making your next forecast much more accurate.