Calculate potential profits from price differences across centralized exchanges including fees and slippage. Identify profitable arbitrage opportunities.
Price on the exchange where you'll buy
Price on the exchange where you'll sell
Amount you're arbitraging
Trading fee on buy exchange
Trading fee on sell exchange
Cost to transfer between exchanges
Time to move funds between exchanges
Expected price slippage during execution
Arbitrage is the practice of buying cryptocurrency on one exchange at a lower price and simultaneously selling it on another exchange at a higher price. The price difference (spread) minus all fees equals your profit.
Spatial Arbitrage: Price differences between exchanges. Triangular Arbitrage: Using three currency pairs on one exchange. Statistical Arbitrage: Algorithmic strategies based on historical patterns.
Price differences emerge from varying liquidity, trading volumes, regional demand, exchange inefficiencies, and temporary market imbalances. These windows are often brief (seconds to minutes).
Speed of execution, low fees, sufficient exchange liquidity, pre-positioned funds on multiple exchanges, and automated monitoring. Manual arbitrage is challenging due to rapid price changes.
Trading fees (0.05-0.25%), withdrawal fees ($1-$50+), network gas fees (especially for ETH/tokens), and slippage (price movement during execution) all erode profits. Calculate total costs carefully.
Your break-even spread equals: Buy Fee % + Sell Fee % + Slippage % + (Withdrawal Fee / Trade Amount × 100). Only execute when actual spread exceeds this by a comfortable margin (2x recommended).
Enter the current price on each exchange. Buy price is where you purchase (lower price), sell price is where you sell (higher price). Check real-time orderbook depth.
USD amount you're arbitraging. Start small ($1,000-$5,000) to test. Larger amounts ($10,000+) increase absolute profit but may face liquidity issues and higher slippage.
Enter the maker/taker fee for each exchange. Typical: 0.1% (Binance/Coinbase Pro), 0.05% (maker on many exchanges), 0.15-0.25% (retail platforms). VIP tiers offer lower fees.
Cost to transfer crypto between exchanges. Varies by coin: Bitcoin ($1-$25), Ethereum ($5-$50), stablecoins ($1-$10 on TRC20/Polygon, $10-$50 on ERC20). Check exchange fee schedules.
Minutes to move funds between exchanges. Bitcoin (30-60 min), Ethereum (5-15 min), fast chains (1-5 min). Longer times = higher price risk. Pre-positioning funds eliminates this.
Price movement during execution. Low liquidity = higher slippage (1-3%+). High liquidity = lower (0.1-0.5%). Use limit orders to control maximum slippage.
Bitcoin trades at $50,000 on Exchange A and $50,500 on Exchange B. You want to arbitrage $10,000:
Result: ~1% spread, ~$75 profit (0.75% return) after all fees
Quantity = Trade Amount ÷ Buy Price
Example: $10,000 ÷ $50,000 = 0.2 BTC
Buy Fee = Trade Amount × (Fee% ÷ 100)
Example: $10,000 × (0.1 ÷ 100) = $10
Total = Trade Amount + Buy Fee
Example: $10,000 + $10 = $10,010
Gross = Quantity × Sell Price
Example: 0.2 × $50,500 = $10,100
Costs = Slippage + Sell Fee + Withdrawal
Example: $50.50 + $10.05 + $25 = $85.55
Profit = Sell Proceeds - Buy Cost
Example: $10,014.45 - $10,010 = $4.45
Price Spread % = ((Sell Price - Buy Price) ÷ Buy Price) × 100
Profit % = (Net Profit ÷ Total Buy Cost) × 100
Min Profitable Spread = Buy Fee % + Sell Fee % + Slippage % + (Withdrawal Fee ÷ Trade Amount × 100)
The spread must exceed your minimum profitable spread for the trade to be worthwhile. Add a safety buffer (1-2%) for unexpected costs.
Different arbitrage strategies suit different traders. Choose based on your capital, technical skills, and time availability.
Manually spot spreads and execute trades. Low barrier to entry but slow and time-intensive.
Pros: No coding needed, low initial capital. Cons: Slow, miss opportunities, labor-intensive.
Keep fiat/crypto on both exchanges. Execute both trades simultaneously without transfers.
Pros: Eliminates transfer time/risk. Cons: Requires 2x capital, exchange custody risk.
Exploit inefficiencies between three pairs on one exchange (BTC/USD, ETH/BTC, ETH/USD).
Pros: No transfers needed, rapid execution. Cons: Complex calculations, rare opportunities.
Use exchange APIs to monitor prices and execute trades automatically when spreads appear.
Pros: Fast, scalable, 24/7 monitoring. Cons: Requires programming, API limits, competition.
Commercial or custom bots with advanced features: multi-exchange scanning, instant execution, rebalancing.
Pros: Optimal speed, sophisticated strategies. Cons: Expensive ($500-$5000+), technical complexity.
Exploit regional price differences (e.g., US vs Korean exchanges with "kimchi premium").
Pros: Large spreads (2-5%+). Cons: Capital controls, regulatory risks, complex banking.
Start with manual arbitrage using pre-positioned funds on 2-3 major exchanges. Once profitable, gradually automate with simple scripts or commercial bots. Most retail arbitrageurs succeed with semi-automated systems rather than fully manual or complex professional setups.
Fees: 0.1% (0.05% with BNB) | Withdrawal: $1-$25 |Liquidity: Highest globally. Fast withdrawals (5-30 min).
Fees: 0.05-0.6% (tiered) | Withdrawal: Free (network fees only) |Liquidity: Excellent for USD pairs. Regulated, trusted.
Fees: 0.16% (maker) / 0.26% (taker) | Withdrawal: $1-$15 |Liquidity: Strong for major pairs. Good API for bots.
Fees: 0.075-0.4% (tiered) | Withdrawal: Free first month, then varies |Liquidity: Good for altcoins.
Fees: 0.1% | Withdrawal: Moderate ($5-$20) |Liquidity: Excellent for small-cap altcoins with spreads.
Fees: 0.2% | Withdrawal: Variable |Liquidity: Lower tier, often has spreads vs major exchanges.
Prices change rapidly. A profitable spread can disappear during the 30-60 seconds it takes to execute trades, turning profits into losses. Use limit orders and act fast.
If transferring funds between exchanges (not pre-positioned), prices can move significantly during the 5-60 minute transfer. The sell-side spread may vanish, leaving you unable to complete the arbitrage.
Spreads exist partly because of low liquidity. Large orders cause slippage - you may not be able to execute at the displayed price. Always check orderbook depth before trading.
Holding funds on exchanges exposes you to hacks, insolvency, and withdrawal restrictions. Only use reputable exchanges with strong security records.
Network fees for blockchain transfers, especially Ethereum ($5-$50+ during congestion). Spread widens with market orders. Bank withdrawal fees if converting to fiat.
High-frequency trading may trigger KYC reviews or account restrictions. Cross-border arbitrage faces capital controls. Tax reporting is complex - every trade is a taxable event.
Arbitrage opportunities are instantly exploited by professional bots with microsecond execution. By the time you see a spread manually, it's often already closed.
Some "spreads" exist due to withdrawal suspensions, network issues, or illiquid orderbooks. Always verify you can actually execute and withdraw before committing capital.
Reach VIP tiers (often $50k-$100k monthly volume) for 0.02-0.05% fees instead of 0.1-0.25%. Use native tokens (BNB on Binance) for fee discounts. Every 0.05% reduction doubles marginal profits.
Keep equal fiat/crypto balances on both exchanges. Execute buy and sell simultaneously, eliminating transfer time and risk. Rebalance periodically to maintain capacity.
Market orders guarantee execution but have slippage. Limit orders (at your target price) qualify for maker fees (often 50% lower) and avoid slippage, but may not fill during fast-moving spreads.
BTC/USD, ETH/USD, and major stablecoins have tightest spreads but highest liquidity (low slippage). Altcoins have wider spreads but higher execution risk. Balance opportunity vs. risk.
Manual arbitrage misses 90%+ of opportunities. Use APIs, websockets, or commercial bots to scan continuously and execute in milliseconds. Even simple Python scripts beat manual trading.
Use TRC20 USDT ($1-$2 fee) instead of ERC20 ($10-$50). Use Lightning Network for Bitcoin ($0.01). Use Polygon/Arbitrum for ETH transfers ($0.10-$2). Withdrawal fees are pure profit loss.
Setup: $10,000 on Binance + $10,000 on Coinbase (50% fiat, 50% BTC). VIP-1 tier (0.05% fees). Automated scanner alerts on spreads >1%. TRC20 USDT for rebalancing ($1 fee).
Opportunity: 1.2% spread appears. Execute $5,000 arbitrage in 30 seconds. Fees: 0.05% × 2 = 0.1% = $5. Slippage: 0.2% = $10. Profit: $60 - $15 fees = $45 (0.9% return).
Volume: If 2-3 opportunities daily, that's $90-135/day = $2,700-$4,050/month on $10k capital (27-40% monthly return). Reality: ~5-15% monthly is achievable for diligent arbitrageurs after accounting for misses and costs.