Results 1 to 6 of 6

Thread: Q: Arbitrage?

  1. #1
    Specialist Member marc's Avatar

    Q: Arbitrage? !!!

    I have read that some brokers don't allow arbitrage trading ... and I googled some stories, where traders got banned/or lost money because of that (if the stories are true, that is ...)

    However, I am not sure if this topic even touches binary options? ... but is it possible to act unknowingly against this rule, when I trade the main currency pairs €/$, €/¥, £/$ and £/¥ at the same time?

  2. #2
    Active Member pipshunter's Avatar
    Not sure will it be possible to make Arbitrage between several binary brokers. To make such arbitrage you have to be able to obtain different pricing for calls and puts on the same asset in different brokers and that the gain of this difference will be bigger than the actual spread. I think this won’t work on simple binary options simply because they are all or nothing type of options. Only on some Touch/ No Touch options it could be possible to make some arbitrage.

  3. #3
    Specialist Member marc's Avatar
    Thanks for clarification! ... it seems that I completely misunderstand the concept of arbitrage ... well, I never had in mind working with that, but I just wanted to be sure not getting banned, because of things I don't even know

  4. #4
    Legendry Member willyw's Avatar
    Quote Originally Posted by marc View Post
    Thanks for clarification! ... it seems that I completely misunderstand the concept of arbitrage ... well, I never had in mind working with that, but I just wanted to be sure not getting banned, because of things I don't even know
    Arbitrage is a trading strategy that is widely used by fund managers and hedge fund managers as well as physical traders. It is not illegal to arbitrage in any assets in the financial industry as long as you have sufficient margin!!!!

  5. #5
    Senior Member LeeChang's Avatar
    Arbitrage is great strategy and very profitable. The biggest problem is that today there are very few good arbitrage opportunities as the markets are becoming more and more effective and the inefficiencies between them are becoming smaller and smaller. I know few guys trading arbitrage on commodities futures and they are very profitable, but the opportunity to trade such arbitrage arise only once or twice a month for a particular commodity.

  6. #6
    Legendry Member willyw's Avatar
    Quote Originally Posted by LeeChang View Post
    Arbitrage is great strategy and very profitable. The biggest problem is that today there are very few good arbitrage opportunities as the markets are becoming more and more effective and the inefficiencies between them are becoming smaller and smaller. I know few guys trading arbitrage on commodities futures and they are very profitable, but the opportunity to trade such arbitrage arise only once or twice a month for a particular commodity.
    Good say leechang, arbitrage opportunities dont come often. Using leverage to arbitrage is risky too. On the other hand we can use binary options to hedge or arbitrage which is safer.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
3