Let’s first define the definition of arbitrage? Based on the KBBI the word arbitrage has the meaning: n The simultaneous purchase and sale of goods for the same goods in two or more markets in the hope of making a profit from the difference in price.

In practice, arbitrage itself is a way in which traders try to get profit from the price difference between digital assets in two different markets. This can happen because not all digital assets have prices that are ‘exact’ in every location or market.

It sounds simple enough, but a lot of traders do it in a way that isn’t quite right.

For example, you are a member of 2 platforms for buying and selling bitcoin, let’s say the first platform is A and the second is Indodax. At one time, you saw the selling price of bitcoin on Indodax at a price of IDR 155,000,000 and the selling price of bitcoin on platform A at a price of IDR 150,000,000.

On the occasion of this price dispute, you immediately buy bitcoin on platform A and transfer the bitcoin to Indodax. Then, you immediately sell the bitcoin at Indodax. Well, the common obstacle experienced by arbitrage like you is processing time.

The process of buying and selling digital assets takes time, although it does not take a very long time, but in that time, the price of digital assets may have gone up or down.

Therefore, this arbitrage method is actually very risky. It could be when you want to buy digital assets at Indodax, there are website problems, such as maintenance or other unexpected conditions. This is an inappropriate arbitrage method because there are many risks. But so many of you still use this method. Agree right?

To minimize this, there are other ways you can do that you must have a balance and bitcoin on both platforms with the same balance value and volume of bitcoin. For example, you have 1bitcoin and 150,000,000 rupiah on both platforms.

When Indodax has a higher selling price at IDR 155,000,000 than Platform A which has a selling price at IDR 150,000,000. At the same time, you must sell 1 bitcoin that you have on Indodax and make a purchase of bitcoin on platform A with the same volume of bitcoin.

It means that now, you have a balance of 305,000,000 rupiah on Indodax and 2 bitcoin on Platform A. Up to this point, you have already made a profit of 5,000,000 rupiah. Furthermore, to restore the initial amount, you can transfer 1 bitcoin on platform A to Indodax. And withdraw 155,000,000 million in Indodax, then, deposit 150,000,000 rupiah to platform A. With this, you will have the same balance and bitcoin value as the initial conditions.

After deducting transaction costs, you will get a profit of approximately 5,000,000 rupiah directly from the remaining difference between the two prices. In addition, you can take advantage of the digital asset price anomaly.

However, there are still risks. Some say that arbitrage is a method of locking profits without risk or risk-free trading, but this is not entirely appropriate. So you have to be able to move fast and be careful!