TriangularArb

Triangular Arbitrage Algorithm

At ƒxyz Network, we utilize a variety of arbitrage algorithms to optimize financial operations and enhance profitability. One notable method is Triangular Arbitrage. This algorithm is specifically designed to detect and exploit price discrepancies among three currencies, typically involving two fiat currencies and one cryptocurrency, such as Bitcoin.

Concept Overview

Triangular arbitrage takes advantage of arbitrage opportunities arising from price mismatches among three different currencies in the foreign exchange market. Our implementation adheres to the principles outlined in a research paper available here. This paper explores the detection of financial market dislocations, with a particular focus on deviations from triangular arbitrage parities involving Digital Currency and fiat currencies.

Implementation

Our algorithm continuously monitors exchange rates for specific currency triplets, identifying deviations that indicate potential arbitrage opportunities. Unlike traditional methods that focus solely on fiat currencies, our approach includes Digital Currencies due to their significant market impact and volatility. The algorithm is crafted to detect these opportunities in real-time and execute trades that capitalize on these discrepancies.

Application

We have developed proprietary code that not only detects these opportunities but also executes trades efficiently through our network of member entities. These members have access to diverse markets, enabling us to exploit arbitrage opportunities more effectively across various exchanges.

This strategic implementation aids in maintaining liquidity and ensuring more stable returns, surpassing simple buy-and-hold strategies as confirmed by the cited research. It exemplifies how ƒxyz Network leverages cutting-edge financial research to enhance operational strategies and profitability.