The importance of the "Spread" on Trading

in HODL2 months ago

There are many ways to grow your stake in your preferred crypto. The first of them, as we already know, is to use it in the primary utility for which it has been conceived, in the case of HIVE, to cure and obtain rewards in exchange. Others, such as delegating part of your stake to some other healing account and obtaining a passive return can be for many the most comfortable way as it is totally neglected.
Then there's trading, sell high, buy low, rinse and repeat.
A very lucrative variant is what is called arbitrage, it is easy, you simply need two exchanges in which the price of HIVE, for example, has a notable difference between them.
For example, the difference of the HIVE / BTC pair between Binance and Hotbit is 22 satoshis so, in theory, buying on Hotbit and selling on Binance could be a great opportunity, as long as the withdrawal fees on both exchanges are reasonable.

arbitrage.jpg

Perhaps the current difference between these two exchanges is not very juicy today, and it may not generate much profit but there are times when the opportunity really does appear and it is worth doing.
However, there is a third option much more efficient and productive and that is what I call the Manual Market Maker route or, if you want, a Manual Liquidity Provider, which is more trendy lately.

Basically, you open coingecko, search the HIVE markets and reorder the list by "spread", which is the difference between the highest of the buyers 'prices and the lowest of the sellers' prices...
In today's case, Hotbit is once again an attractive candidate since there is a spread of more than 5%.

spread.jpg

It must be said that this spread difference becomes much more acute in those exchanges in which the trading volume is very poor, in the case of Hotbit the current 24h volume is only 2.2 BTC or about 36,000 USD... and also It must be said that coingecko does not list all the available exchanges, so it is easy to find one with higher spreads.

Advantages of this last alternative?
Obviously, you save time and also the withdrawal fees.

Do you want to see tangible results?

Below you have my monitoring table for this month, I started with 150 HIVE (0.00124115 BTC invested) that have become 339 HIVE (0.00213696 BTC) in 19 days just for doing a few operations a day, sometimes none (LOL)...

image.png

It is not totally unattended but almost but is perfectly compatible with my available time which is not too much left I can assure you

Enjoy!

@toofasteddie

*Disclaimer: This is just my personal point of view, please, do your own assessment and act consequently. Neither this post nor myself is responsible of any of your profit/losses obtained as a result of this information.


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Posted Using LeoFinance Beta

Glad you like it :-)

Look who's manipulating price for HIVE...
Good for you. From 150 to 339 HIVE it's quite some profits.

Posted Using LeoFinance Beta

I am not manipulating but providing liquidity ;-)

Sure...
This should hit all trending possible on any crypto related platform so plebs like me can have a look at how easy money are to be made.

Posted Using LeoFinance Beta

I will have to check that out. That would be a nice way to make some easy money if it is there. As long as you can fund both sides. Some of the spreads with in an exchange are pretty good but to then take it to the differnce in exchanges. Nice. Great tip. Thanks!

Posted Using LeoFinance Beta

Was all this done on Hotbit?

not there.