Knowing that arbitrage types exist is one thing. Knowing exactly how to execute each one — what buttons to press, in what order, what can go wrong — is another.
TL;DR: Every arbitrage trade starts with three checks: net profit positive? Both legs executable? Order book deep enough? Spot-Spot requires transfer time management. Spot-Futures and Futures-Futures execute simultaneously with no transfer risk. DEX types add gas, MEV, and on-chain complexity.
Regardless of type, every arbitrage trade starts with the same three checks:
Is the net profit positive? After slippage, fees, funding, and withdrawal costs. Not the spread — the actual profit.
Can I execute both legs? D/W open for spot trades, sufficient margin for futures trades.
Is the order book deep enough for my size? If slippage eats more than 30% of the gross spread at my intended size, reduce the size or skip.
Buy token on Exchange A spot market, transfer it, sell on Exchange B spot market.
Keep capital on BOTH exchanges. When you see a spread: buy on A AND sell on B simultaneously from pre-positioned funds. Transfer to rebalance afterward. Capture the spread instantly with zero transfer risk.
Buy on spot market, short on futures (or vice versa). The profit comes from the price difference between spot and futures.
If you're short futures and funding is positive — you're getting paid to hold. If funding is negative — you're paying. Recalculate if it's still worth holding.
At 5x leverage, a 20% price move against your short means liquidation. The exchange doesn't know about your spot hedge on another exchange. Keep margin healthy.
Long on one exchange's perpetual futures, short on another's. Same token, different prices. Delta-neutral position.
Remember: your hedge is on a DIFFERENT exchange. If one leg gets liquidated, you still have the other position open and unhedged. Use conservative leverage.
Buy on CEX spot market and sell on a DEX (or vice versa). Requires a wallet with gas tokens for the DEX's chain.
AMM pools show "Total Value Locked" (TVL). Higher TVL = deeper liquidity = less slippage. But TVL alone isn't enough — check the actual price impact for your trade size.
Bots on Ethereum can see your pending transaction and front-run it — buying before you, pushing the price up, then selling after you buy. Use MEV protection (Flashbots on Ethereum, Jito on Solana) or set tight slippage tolerance.
Long/short on CEX futures, opposite position on DEX perpetual protocol (Hyperliquid, Aster, etc.). The newest and least competitive type.
→ Spot-Spot (but need to transfer) or add funds to a second exchange first
→ Spot-Futures or Futures-Futures — no transfer needed, faster execution
→ Spot-DEX — good for larger spreads but slower execution
→ Futures-DEX — newest and least competitive, bigger spreads
Regardless of type: calculate your ACTUAL profit after ALL costs before executing. Not the spread. The profit. If that number is positive — go. If it's negative or barely positive — skip.
VoltArb calculates actual net profit using order book depth, slippage, fees, and funding rates.
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