Triangle arbitrage profit of digital currency
Publish: 2021-05-14 07:39:03
1. It has to be said that this instry is very close to money, so people often ask how you make money in the instry and how you can make money. Today, let's share some profit models I know<
first line: mining, mining machine, mine (ore pool)
all three are related to mining, but they are also different
Mining: we don't discuss the technical details here. From the perspective of profit, mining has the lowest threshold. Even if we need professional mining machinery now, we can still buy a mining machine to make money. If we become bigger, we can open a mine. Without talking about the risk, mining is the simplest way to make money. The investment cost is low, the rate of return is high, and the time cost is high
mining machinery: the business of manufacturing mining machinery is very hot, and there is a high threshold, so it is difficult for non professionals to become manufacturers. Ant mining machine in the bull market does not worry about selling. Especially after 1994, as far as I know, foreign domestic ore feeders were towed away by trucks. However, the threshold of manufacturers is already very high, and it is difficult for ordinary people to get in touch with them, so there are two dealers. Mining business contact is not much, the second-hand market seems to be very chaotic
mines (ore pools) of course, mines and ore pools are inseparable. Why? The mine pool exists in order to avoid the risk of the mine. The mine pool will pay the cost of the miners according to the time according to the calculation force. Of course, it also needs to draw a percentage, and the miners will be able to keep their income from drought and flood. But the only thing to do is to bring people to the mine. Offline mines are also managed by their own machines, and can also be managed by others. There is a certain threshold, risk and income coexist
second line: information platform, exchange, wallet, currency speculation
consulting platform: something that must exist in the Internet era, providing information and consulting aggregation. The first thing new people come into contact with is information media. In the 17 years since the outbreak of digital currency, bitcoin's Internet search index has exploded. Many people want to know about digital currency, so such an information platform is sure to survive. Drainage, content, value realization and value extension are generally the ways of making profits
exchange: the best understanding is that all flows and proction currencies are for trading. Only when a transaction has a price can it be valued. Many problems will also be found in the transaction, such as the famous "bitcoin expansion". Only by finding and solving problems can the instry develop better. We all know the mode of making money in the exchange. It's the makers who make money. It's just like casinos and securities dealers. They lose more money and earn less, but the exchange is stable. In addition to the handling charges, it seems that the money charge is also a profit model. The threshold of the exchange is also high. In addition to trading risk and platform risk, it pays more attention to policy dynamics. Big exchanges now have "currency exchange", "fire currency" and so on
wallets: both hot and cold wallets are procts, and coin circles are just needed for this kind of procts. Online wallet is generally free, and then through other ways to make money, such as usually do exchanges, or there are investment activities
currency speculation: simple speculation, uncontrollable risk, too many factors affecting the price. We can envy the good luck of others, but we should not hope that we have such good luck. Therefore, there are generally three modes of currency speculation, which can be more "smart" to avoid risks: 1. Fixed investment 2. Quantitative trading 3. Arbitrage: spot move brick, futures arbitrage. Now, it seems that there is a fourth kind of profit margin in the OTC channel.
first line: mining, mining machine, mine (ore pool)
all three are related to mining, but they are also different
Mining: we don't discuss the technical details here. From the perspective of profit, mining has the lowest threshold. Even if we need professional mining machinery now, we can still buy a mining machine to make money. If we become bigger, we can open a mine. Without talking about the risk, mining is the simplest way to make money. The investment cost is low, the rate of return is high, and the time cost is high
mining machinery: the business of manufacturing mining machinery is very hot, and there is a high threshold, so it is difficult for non professionals to become manufacturers. Ant mining machine in the bull market does not worry about selling. Especially after 1994, as far as I know, foreign domestic ore feeders were towed away by trucks. However, the threshold of manufacturers is already very high, and it is difficult for ordinary people to get in touch with them, so there are two dealers. Mining business contact is not much, the second-hand market seems to be very chaotic
mines (ore pools) of course, mines and ore pools are inseparable. Why? The mine pool exists in order to avoid the risk of the mine. The mine pool will pay the cost of the miners according to the time according to the calculation force. Of course, it also needs to draw a percentage, and the miners will be able to keep their income from drought and flood. But the only thing to do is to bring people to the mine. Offline mines are also managed by their own machines, and can also be managed by others. There is a certain threshold, risk and income coexist
second line: information platform, exchange, wallet, currency speculation
consulting platform: something that must exist in the Internet era, providing information and consulting aggregation. The first thing new people come into contact with is information media. In the 17 years since the outbreak of digital currency, bitcoin's Internet search index has exploded. Many people want to know about digital currency, so such an information platform is sure to survive. Drainage, content, value realization and value extension are generally the ways of making profits
exchange: the best understanding is that all flows and proction currencies are for trading. Only when a transaction has a price can it be valued. Many problems will also be found in the transaction, such as the famous "bitcoin expansion". Only by finding and solving problems can the instry develop better. We all know the mode of making money in the exchange. It's the makers who make money. It's just like casinos and securities dealers. They lose more money and earn less, but the exchange is stable. In addition to the handling charges, it seems that the money charge is also a profit model. The threshold of the exchange is also high. In addition to trading risk and platform risk, it pays more attention to policy dynamics. Big exchanges now have "currency exchange", "fire currency" and so on
wallets: both hot and cold wallets are procts, and coin circles are just needed for this kind of procts. Online wallet is generally free, and then through other ways to make money, such as usually do exchanges, or there are investment activities
currency speculation: simple speculation, uncontrollable risk, too many factors affecting the price. We can envy the good luck of others, but we should not hope that we have such good luck. Therefore, there are generally three modes of currency speculation, which can be more "smart" to avoid risks: 1. Fixed investment 2. Quantitative trading 3. Arbitrage: spot move brick, futures arbitrage. Now, it seems that there is a fourth kind of profit margin in the OTC channel.
2. Theoretically speaking, three currency pairs among three kinds of currencies that satisfy the triangular relationship can be used for triangular arbitrage
in addition, we need to meet the two conditions of good liquidity and low transaction cost
therefore, the most suitable one is: USD EUR JPY aud GBP CHF CAD, in which the prices of any three currencies are compared with each other
then put it into practice. The internationally popular algorithmic trading and arbitrage hedging are dominated by big investment banks, which rely on the computing power competition of computer groups and even servers. Some investment banks even spend a lot of money to move the whole company close to the exchange in order to pursue a little advantage in network speed. The EA you studied is the most rough, backward and simple algorithm. It really has no future.
in addition, we need to meet the two conditions of good liquidity and low transaction cost
therefore, the most suitable one is: USD EUR JPY aud GBP CHF CAD, in which the prices of any three currencies are compared with each other
then put it into practice. The internationally popular algorithmic trading and arbitrage hedging are dominated by big investment banks, which rely on the computing power competition of computer groups and even servers. Some investment banks even spend a lot of money to move the whole company close to the exchange in order to pursue a little advantage in network speed. The EA you studied is the most rough, backward and simple algorithm. It really has no future.
3. When we discuss this triangle arbitrage, we first introce a concept: cross exchange rate, which refers to the price of one non US dollar currency representing the price of another non US dollar currency, U.S. dollar / Hong Kong dollar = 7.80. Suppose that the cross exchange rate of a certain market is HKD / JPY = 16 (because the cross exchange rates in different markets are different in many cases (sometimes the cross exchange rates in the same market do not match the theoretical cross exchange rates), In this case, we can carry out the following operations: suppose you have 1000 US dollars, if you first exchange US dollars into HK $1000 * 7.80 = 7800, and then exchange US dollars into Japanese yen 7800 * 16 =. What you get is Japanese yen, But if you exchange US dollars directly into yen, you can only get 1000 * 120 =. This is called triangle arbitrage, In this way, you can earn 4800 yen. Here are the steps of triangle Arbitrage: 1. Buy 7800 Hong Kong dollars with 1000 US dollars; 2. Buy 7800 Hong Kong dollars with the cross exchange rate; 3. Buy 1040 US dollars with the cross exchange rate; 4, Of course, any operation of transnational capital flow is combined and multi-channel, because there are great risks in any arbitrage activities
4. Theoretically, it is a risk-free arbitrage model, which is actually applied in the information interconnection and automated trading of technology programs in the whole world. Even if there is arbitrage space in the market and you also have EA, when your EA calculates that there is arbitrage space and you want to enter the market, the arbitrage space has been modified by smart arbitragers who have automated trading programs like you, It depends on whose trading environment, proceres and equipment are better and arbitrage efficiency is faster. Moreover, when arbitrage space appears, the market liquidity is limited, and the price will be quoted repeatedly when placing an order. Pro test, almost all of the formal platform are not set profit, can only be achieved in the simulation environment and without repeated quotation.
5.
Cross arbitrage refers to the international arbitrage in which investors buy cheap and sell expensive at the same time when the arbitrage exchange rates of three or more currencies are different from the actual published exchange rates
for example, in bank a, the exchange rate of US dollar in Dutch dollar is 1.9025fl / $, in bank B, the exchange rate of US dollar in Canadian dollar is 1.2646c $/ $, and in Bank C, the exchange rate of Canadian dollar in Dutch dollar is 1.5214fl/c $. According to the quotation of Bank A and bank B and the calculation of cross exchange rate, we can get the price of Canadian dollar in kilde as follows: (1.9025fl / $) / (1.2646c $/ $) = 1.5044fl / C $
the cross exchange rate level is different between Bank C and Canadian dollar, which means that there is arbitrage space. Because the exchange rate of Canadian dollar of Bank C is higher than the result calculated by cross exchange rate, it shows that one unit of Canadian dollar has a higher value in bank C. Therefore, if one unit of Canadian dollar is exchanged for one unit of Canadian dollar through the transaction between bank a and bank B at the rate of 1.5044 kird, and the Canadian dollar is exchanged with Bank C at the rate of 1.5214 kird, then a triangle arbitrage of 0.017 kird will be obtained
triangular arbitrage process: the exchange rate calculated through cross exchange rate is different from the actual exchange rate in the market, resulting in arbitrage space in the market. Market participants can buy and sell foreign currencies among different banks at the same time, so-called triangle arbitrage
6. When we discuss this triangle arbitrage, we first introce a concept: cross exchange rate, which refers to the price of one non US dollar currency representing the price of another non US dollar currency, U.S. dollar / Hong Kong dollar = 7.80. Suppose that the cross exchange rate of a certain market is HKD / JPY = 16 (because the cross exchange rates in different markets are different in many cases (sometimes the cross exchange rates in the same market do not match the theoretical cross exchange rates), In this case, we can carry out the following operations: suppose you have 1000 US dollars, if you first exchange US dollars into HK $1000 * 7.80 = 7800, and then exchange them into yen 7800 * 16 = 124800 through cross exchange rate, you get 124800 yen, But if you exchange US dollars directly into yen, you can only get 1000 * 120 = 120000, In this way, you can earn 4800 yen. The following are the steps of triangle Arbitrage: 1. Buy 7800 Hong Kong dollars with 1000 US dollars; 2. Buy 124800 yen with 7800 Hong Kong dollars according to the cross exchange rate; 3. Buy 1040 US dollars with 124800; 4. Repeat this operation continuously. In fact, this operation is often used by multinational enterprises. Suppose that an American enterprise wants to invest 10 million US dollars in Japan, Of course, any operation of transnational capital flow is combined and multi-channel, because there are great risks in any arbitrage activities
7. If the price is lower and lower, the total fixed investment cost will be smaller
move bricks arbitrage, because there will be some differences in the price of currencies in major exchanges. Move bricks arbitrage is to earn the difference. Now the income of indivial move brick arbitrage is not very ideal, and the operation is more
if someone comes to you and says that they can help you carry bricks for arbitrage, try not to believe it, and try to keep your money in the place you can control
if you want additional income, you can choose the financial management of major platforms. There's a push in the exchange or in the wallet.
move bricks arbitrage, because there will be some differences in the price of currencies in major exchanges. Move bricks arbitrage is to earn the difference. Now the income of indivial move brick arbitrage is not very ideal, and the operation is more
if someone comes to you and says that they can help you carry bricks for arbitrage, try not to believe it, and try to keep your money in the place you can control
if you want additional income, you can choose the financial management of major platforms. There's a push in the exchange or in the wallet.
8. Buying price
triangle arbitrage calculation: Triangle: A / bxc / AXB / C & gt; 1. B buys a and C buys B< Triangle: change three equations into the same pricing method, and then multiply the coefficients. If the result is greater than 1, do it in the direction of multiplication. If the result is less than 1, do it in the direction of multiplication, For example,
New York market: 1 US dollar = 7.82 Hong Kong dollars, the pricing method here is similar to (Hong Kong dollar / US dollar)
Hong Kong market: 1 Hong Kong dollar = 0.97 RMB (RMB / Hong Kong dollar)
Shanghai market: 1 US dollar = 6.75 RMB (RMB / US dollar)
change to the same pricing method first, In other words, in the form of (HKD / USD) * (RMB / HKD) * (USD / RMB), in the above example, we need to convert the Shanghai market to 1 RMB = (1 / 6.75) USD USD / RMB)
start calculation: (HKD / USD) * (RMB / HKD) * (USD / RMB) = 7.82 * 0.97 * (1 / 6.75) = 1.1238 & gt; 1. In this way, we have to operate in the direction of multiplication: in the New York market, 1 US dollar buys 7.82 Hong Kong dollars, in the Hong Kong market, 7.82 * 0.97 = 7.5854 RMB with 7.82 Hong Kong dollars, in the Shanghai market, 7.5854 RMB buys 7.5854 * (1 / 6.75) = 1.124 US dollars, thus earning 0.124 US dollars
in addition, if the pricing method of (USD / HKD) * (HKD / RMB) * (RMB / USD) is used, it is necessary to convert the Hong Kong market and New York market,
New York market: 1 HKD = (1 / 7.82) USD, (USD / HKD),
Hong Kong market: 1 RMB = (1 / 0.97) HKD, (HKD / RMB),
Hong Kong market: 1 RMB = (1 / 0.97) HKD, (HKD / RMB),
start calculation: (HKD / USD) * (RMB / HKD) * (USD / RMB) = (1 / 7.82) * (1 / 0.97) * 6.75 = 0.8899 & lt; So there are arbitrage opportunities: in the Shanghai market, 6.75 RMB is exchanged for 1 US dollar, in the New York market, 1 US dollar is exchanged for 7.82 Hong Kong dollars, and finally in the Hong Kong exchange market, 7.82 Hong Kong dollars is exchanged for 7.5854 RMB, thus earning 0.8354 RMB It should be noted that when entering and exiting, they usually get back the same currency, so the New York stock exchange can only be used as a transit station. The two trading markets containing RMB are used as import and export markets respectively.) The difference between the exchange rates provided above is relatively large, and generally there will be no huge profit of a few yuan. Moreover, the above formula uses all intermediate exchange rates, and the actual transaction needs to use the buy and sell prices of each market
in fact, there is no essential difference between the direction of multiplication and the direction of division, but compared with the method of pricing, the direction of division is reverse operation, and the direction of multiplication is forward operation.
triangle arbitrage calculation: Triangle: A / bxc / AXB / C & gt; 1. B buys a and C buys B< Triangle: change three equations into the same pricing method, and then multiply the coefficients. If the result is greater than 1, do it in the direction of multiplication. If the result is less than 1, do it in the direction of multiplication, For example,
New York market: 1 US dollar = 7.82 Hong Kong dollars, the pricing method here is similar to (Hong Kong dollar / US dollar)
Hong Kong market: 1 Hong Kong dollar = 0.97 RMB (RMB / Hong Kong dollar)
Shanghai market: 1 US dollar = 6.75 RMB (RMB / US dollar)
change to the same pricing method first, In other words, in the form of (HKD / USD) * (RMB / HKD) * (USD / RMB), in the above example, we need to convert the Shanghai market to 1 RMB = (1 / 6.75) USD USD / RMB)
start calculation: (HKD / USD) * (RMB / HKD) * (USD / RMB) = 7.82 * 0.97 * (1 / 6.75) = 1.1238 & gt; 1. In this way, we have to operate in the direction of multiplication: in the New York market, 1 US dollar buys 7.82 Hong Kong dollars, in the Hong Kong market, 7.82 * 0.97 = 7.5854 RMB with 7.82 Hong Kong dollars, in the Shanghai market, 7.5854 RMB buys 7.5854 * (1 / 6.75) = 1.124 US dollars, thus earning 0.124 US dollars
in addition, if the pricing method of (USD / HKD) * (HKD / RMB) * (RMB / USD) is used, it is necessary to convert the Hong Kong market and New York market,
New York market: 1 HKD = (1 / 7.82) USD, (USD / HKD),
Hong Kong market: 1 RMB = (1 / 0.97) HKD, (HKD / RMB),
Hong Kong market: 1 RMB = (1 / 0.97) HKD, (HKD / RMB),
start calculation: (HKD / USD) * (RMB / HKD) * (USD / RMB) = (1 / 7.82) * (1 / 0.97) * 6.75 = 0.8899 & lt; So there are arbitrage opportunities: in the Shanghai market, 6.75 RMB is exchanged for 1 US dollar, in the New York market, 1 US dollar is exchanged for 7.82 Hong Kong dollars, and finally in the Hong Kong exchange market, 7.82 Hong Kong dollars is exchanged for 7.5854 RMB, thus earning 0.8354 RMB It should be noted that when entering and exiting, they usually get back the same currency, so the New York stock exchange can only be used as a transit station. The two trading markets containing RMB are used as import and export markets respectively.) The difference between the exchange rates provided above is relatively large, and generally there will be no huge profit of a few yuan. Moreover, the above formula uses all intermediate exchange rates, and the actual transaction needs to use the buy and sell prices of each market
in fact, there is no essential difference between the direction of multiplication and the direction of division, but compared with the method of pricing, the direction of division is reverse operation, and the direction of multiplication is forward operation.
9. Arbitrage refers to the use of foreign exchange differences in different foreign exchange markets, in a foreign exchange market to buy a currency, while in another foreign exchange market to sell the currency, in order to earn profits. Due to different foreign exchange markets involved in arbitrage, it can be divided into two corner arbitrage, triangle arbitrage and multi corner arbitrage
for example, one dollar can buy 0.7 pounds, one pound can buy 9.5 francs, and one Franc can buy 0.16 dollars. A person who carries out this kind of transaction can get $1.064 by relying on $1, and the interest rate is 6.4%
generally speaking, arbitrage must meet the following three conditions:
(1) there are different foreign exchange markets and exchange rate differentials
(2) arbitragers must have a certain amount of capital and have branches or agencies in major foreign exchange markets
(3) arbitragers must have certain skills and experience, be able to judge the changes and trends of exchange rates in various foreign exchange markets, and act quickly according to the forecast. Otherwise, more complicated arbitrage will get twice the result with half the effort
at present, the management of foreign exchange at home and abroad is particularly strict, because arbitrage is easy to cause the imbalance of international monetary balance, so arbitrage is not allowed at home, and it is easy to get into a lawsuit if it is careless.
for example, one dollar can buy 0.7 pounds, one pound can buy 9.5 francs, and one Franc can buy 0.16 dollars. A person who carries out this kind of transaction can get $1.064 by relying on $1, and the interest rate is 6.4%
generally speaking, arbitrage must meet the following three conditions:
(1) there are different foreign exchange markets and exchange rate differentials
(2) arbitragers must have a certain amount of capital and have branches or agencies in major foreign exchange markets
(3) arbitragers must have certain skills and experience, be able to judge the changes and trends of exchange rates in various foreign exchange markets, and act quickly according to the forecast. Otherwise, more complicated arbitrage will get twice the result with half the effort
at present, the management of foreign exchange at home and abroad is particularly strict, because arbitrage is easy to cause the imbalance of international monetary balance, so arbitrage is not allowed at home, and it is easy to get into a lawsuit if it is careless.
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