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What is triangular arbitrage in the FX markets? [ Ссылка ] PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE This is an introduction to trading forex arbitrage. Triangular Arbitrage is literally the process of buying and selling an instrument that has exactly the same value for different prices for a short term anomaly gain. Say, one price is trading at $10, the other is trading at $11 - it is exactly the same product or market - we are going to buy at $10 and sell at $11. This existed in the past in the futures market when futures were traded on different exchanges. It still happens on electronic markets but on much shorter timeframes. Let's see how it could work in the currency markets

How to Arbitrage the Forex Markets: Triangular Arbitrage
3 or more FX Pairs
examples:
EUR/USD: 1.1325
EUR/GBP: 0.7805
GBP/USD: 1.4528

Buy EUR10,000 at 1.1325 = USD11,325
Sell EUR10,000 at 0.7805 = GBP7,805
Buy GBP7,805 at 1.4528 = USD11,339
= USD14 per EUR10,000

The idea is that if the implied cross is not equal to the actual cross quote then an arbitrage opportunity exists. The big risk with triangular arbitrage is obviously execution - all trades have to be executed simultaneously.

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