Arbitrage is the simultaneous purchase and sale of a cryptocurrency to profit from a difference in the price. It is a trade that profits by exploiting the price differences on different markets. Arbitrage exists as a result of market inefficiencies.
The arbitrage feature of Cryptohopper looks for these market inefficiencies and checks for opportunities in the following way:
- Buy coin on BTC market
- Sell coin on ETH or XMR market
- Sell ETH or XMR on BTC market
- Buy ETH or XMR on BTC market
- Buy coin on ETH or XMR market
- Sell coin on BTC market
The arbitrage feature takes the trading fees in consideration for the calculation of the arbitrage possibilities and you can also configure how much minimum profit you want to make.
If an arbitrage trade fails and the hopper is left with ETH, XMR or the coin it wanted to trade, then it will be added to your open positions.
Currently arbitrage is only available on Poloniex and Bittrex with collect currency set to BTC.