I was just wondering what could happen if someone just opens two opposite positions (in different exchanges) of btc in january 10, if the price goes up or down , one of the positions Will get liquidated but the profits of the other one could end being profitable enought to cover the losses of the liquidated one?
All i know is that market movement that day Will be crazy
this is what they call hedging, and maybe gets close to the concept of arbitrage
it's the basis of the "diversification" strategy that is very popular but retarded, it's not a profit making strategy but a loss avoidance strategy
arbitrage is the same thing except different pairs, eg btc/usd and btc/eur - you could hold positions in both and profit on the divergence of usd/eur
Exchanges take high amounts of interest for both bets. The wrong one and the right one. Very hard to get over the cost of these loan costs.
You can use decentralized exchanges where the one trade will pay funding while the other trade receives funding. You don’t get negative funding rates on binance and the like but on dydx or drift or even bitmex.
