Arbing Chinese exchanges is very difficult (particularly from BTCE) -- hence why there is a persistent spread between the exchanges. Removing large amounts of CNY into USD and outside of Chinese banks is difficult. One way to take advantage of this spread is to analyze the range of (BTCCNY/USDCNY)-BTCUSD. When at range lows ($4-6 under spread), buy BTCCNY, transfer out and sell for USD. When at range highs ($4-6 above spread), buy BTCUSD, transfer out and sell for CNY.
But when your accounts become heavily outside of equilibrium (i.e. you cannot buy either BTCCNY or BTCUSD), you are stuck until the spread reverts to the mean and you can transfer out without losing profits.
But when your accounts become heavily outside of equilibrium (i.e. you cannot buy either BTCCNY or BTCUSD), you are stuck until the spread reverts to the mean and you can transfer out without losing profits.
Sorry Jesus, Im trying to understand what are you explaining but it's hard.
1- How can I analyze the range? theorically is BTCCNY/BTCUSD, no?
2- When you talk about range talking in USD means that BTCCNY is at 240 USD and BTCUSD is at 230 USD?, then buy BTCUSD and transfer where? you mean withdraw the USD to CNY BANK account and viceversa???
Can I do the same with BTCEUR?
Please can you explain that stuff a little bit more detailed? Thanks Jesus!
Jesus?
I think this can best be explained by a chart. On the top section, you can see the spread between OKcoin.cn and Bitstamp. On the below section, you can see the spread between Bitstamp and BTCE.
So to analyze the China-Stamp spread, we convert OKcoin to USD value, then subtract Stamp -- OKCOIN:BTCCNY/USDCNY-BITSTAMP:BTCUSD.
To analyze the Stamp-BTCE spread, we can use BITSTAMP:BTCUSD-BTCE:BTCUSD.
This chart shows ~ 3-4 weeks of price action.
So if we want to exploit these spreads, we need funded accounts on all three exchanges. When a sizable spread develops between two of the exchanges, buy or sell as indicated. When the spread closes again, reverse that buy or sell to repair equilibrium to your accounts (otherwise, eventually, you will end up with all your money on one exchange, with no ability to arb).
In other words, this is not real arbitrage. There is no movement of fiat (USD, CNY). What you are doing is taking advantage of the extremes of spread among the exchanges, by buying when one exchange is "cheap", transferring BTC to an "expensive" exchange and selling. When the spread leaves that extreme and returns to normal, you can buy back on that second exchange and transfer your funds back. Rinse and repeat. It only works if you can keep your accounts somewhat balanced over time.
Does that help?