Cross-Exchange Arbitrage

Core idea

Cross-exchange arbitrage compares the same or closely matched asset across venues and trades a price gap. Inventory placement, transfer delays, fees, and venue credit risk determine whether the apparent spread is executable.

Implementation

Prefunded inventory and synchronized order execution are often required to capture a short-lived difference.

Primary risk

One leg can fill while the other fails, or assets can become trapped on a venue during stress.

Frequently asked questions

What is cross-exchange arbitrage?

Cross-exchange arbitrage compares the same or closely matched asset across venues and trades a price gap. Inventory placement, transfer delays, fees, and venue credit risk determine whether the apparent spread is executable.

What is the main risk of cross-exchange arbitrage?

One leg can fill while the other fails, or assets can become trapped on a venue during stress.