Question 1

What is triangular arbitrage in crypto?

Accepted Answer

Triangular arbitrage is a trade that loops through three markets on the same exchange and comes back to where it started with more money than it left with. You begin in one currency, usually a stablecoin like USDT, convert it into a first asset such as BTC, convert that into a second asset such as ETH using the cross pair, then sell the second asset back to USDT. If the three prices are momentarily out of line, the round trip ends with more USDT than you began with, and the difference is your profit. It needs no directional bet — you are not predicting that any coin goes up, only exploiting a pricing inconsistency between the three pairs that quote them. The catch is that it is a fee-and-speed game: each of the three conversions pays a taker fee, the edge is usually a fraction of a percent, and it disappears in seconds as other traders and bots close the gap. This calculator prices the whole loop so you can see whether a given set of quotes actually leaves a profit once the three fees are paid.

Question 2

How is the profit on a triangular arbitrage loop calculated?

Accepted Answer

Start with your capital in the quote currency. Leg one converts it into the first asset by dividing by that pair's price, and a taker fee is taken off. Leg two converts the first asset into the second using the cross price, again minus a fee. Leg three sells the second asset back to the quote currency by multiplying by its price, minus a third fee. The final amount is your start times the combined price factor times one-minus-fee cubed, because you pay a fee three times. Written as a single number, the gross multiplier of the loop is the sell price divided by the product of the two buy prices; if that multiplier is above one before fees, the loop is theoretically profitable, and the calculator checks whether it stays above one after the three fees are deducted. The reverse loop simply runs the triangle the other way, and its multiplier is exactly the inverse — so at most one direction is profitable, and this tool computes both and highlights the better one.

Question 3

What is the break-even fee for triangular arbitrage?

Accepted Answer

The break-even fee is the per-leg trading fee at which the loop returns exactly your starting capital — profit zero. Because you pay the fee on all three legs, it is found from the gross multiplier of the loop: the break-even fee equals one minus the cube root of one over that multiplier. If the loop's gross multiplier is 1.006 — a six-tenths-of-a-percent raw edge — the break-even fee per leg is roughly 0.2 percent, so any exchange charging more than that per trade turns the arb into a loss. This is why triangular arbitrage is almost always run with maker orders, high VIP fee tiers, or fee rebates, and why a raw edge that looks juicy on paper often vanishes the moment you use a standard taker fee. The calculator shows the break-even fee for the profitable direction so you can compare it directly against the fee your account actually pays.

Question 4

Why did my triangular arbitrage not work in practice?

Accepted Answer

The most common reason is that the edge was never real once execution is accounted for. The prices you see are the top of the order book, but a real market order eats into it, so your average fill is worse than the quote — this is slippage, and on a thin cross pair it can be larger than the whole arbitrage edge. Second, the three legs do not fill at the same instant; by the time leg three executes, the price that made the loop profitable has often already moved, because faster bots co-located at the exchange took it. Third, fees: a standard taker fee on three legs frequently exceeds the raw edge, which is exactly what the break-even fee in this calculator is warning you about. Finally, there are practical frictions — minimum order sizes, rounding, and the risk of being left holding the middle asset if a leg fails. Treat the calculator's output as the best possible case with perfect fills; the real result is that number minus slippage and latency, which is why sub-percent triangular arbs rarely survive on a retail account.

三角裁定取引計算機

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順方向と逆方向 — どちらの方向が利益をもたらしますか?

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