Lessons in the art of arbitrage trading - Bitcoin and Altcoins News


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June 18, 2019

Lessons in the art of arbitrage trading

Now that you’ve been clued up on how to purchase bitcoin & altcoins and how to purchase cryptocurrencies at international rates, the next step is to teach you how to arbitrage trade with OVEX cryptocurrency exchange.
You might be thinking, “What on earth is arbitrage trading?” or “I’ve heard of this before and always wondered what it is.” Whichever one you thought of, we’re going to make the understanding of what it is and how to take advantage of it as simple as possible.

What Is Arbitrage?

In a nutshell, arbitrage is purchasing an asset in one market and simultaneously selling it in another market at a higher price and thus profiting on the temporary difference in price. So what is the holy grail of outperforming the market? Taking advantage of inefficiencies in the market is considered to be one of the best, risk-free forms of profit trading for investors.
While arbitrage opportunities exist in all markets, they are especially prevalent in the cryptocurrency market due to the age and volatility of the market. There are often notable price differences between various exchanges and various countries.
Many South Africans who have purchased or wanted to buy Bitcoin often question why they have to pay a premium for Bitcoin in South Africa. We often hear about the Bitcoin price quoted in USD and wonder why, when we do the conversion, we are sometimes paying up to $500 more per Bitcoin. The reason we are told is because of “supply and demand in South Africa”.
Bitcoin arbitrage opportunity in South Africa
Finally, we are getting an exchange that will allow us to take advantage of these arbitrage opportunities. With OVEX’s enhanced crypto trading platform launching at the end of June, investors can take advantage of these price differences by purchasing a specific cryptocurrency at international rates, and immediately selling it on the OVEX exchange where the local price is higher.
“Our partnership with San Francisco based Trust Token (TUSD), a USD backed stablecoin with over $250m in circulation, will allow our traders access to TUSD at the bank rate. They can then use the TUSD to buy crypto at the prevailing USD value and sell it at the prevailing ZAR value. With all of this done on OVEX, our clients will avoid wasting time jumping between exchanges and avoid unnecessary fees”, says Jonathan Ovadia, CEO OVEX

What are the lessons to be learnt in successful arbitrage trading?

Reduce the holding time of an asset – cryptocurrency prices are volatile, and prices move quickly; thus, you need to ensure that you sell fast enough to take advantage of any arbitrage opportunity that might exist. If you are moving between exchanges, you need to be aware that your cryptocurrency might not clear immediately and that the time taken for a cryptocurrency transaction to be confirmed varies.
Look for profits at the moment of the transaction – be sure to consider both the prices you can buy and sell at, as well as any trading fees involved.
Make good decisions and trade on a trusted secure exchange – it is not often that you can take advantage of an arbitrage opportunity on just one platform. Usually, one has to trade between exchanges to take advantage of arbitrage opportunities, which introduces an element of risk due to the time this requires. If you are able to do so on just one exchange, then be sure to take advantage of this opportunity.
As with any trading, ensure that you are trading on a secure and trusted exchange. Consider the security features of the exchange as well as the legitimacy of the individuals involved in or backing the exchange.

How To Arbitrage Trade With OVEX:

To benefit from arbitrage trading with OVEX, users need to do the following:
  1. Sign up with OVEX.
  2. Register with TUSD
  3. Buy TUSD at international rates. (Click here for info on how to do this)
  4. Sell TUSD for BTC
  5. Sell BTC for ZAR

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