People who are looking for fast returns on their investments should check out the arbitrage strategy set out by OKEx’s Thomas Tse.
In a post on OKEx’s blog Tse, the head of the exchange’s quantitative strategy team, described the method he used to generate a return on investment in just seven days.
The arbitrage trade netted a return of almost 1.7 per cent in just one week, giving investors a taste of how they can make money trading arbitrage on OKEx, the world’s biggest cryptocurrency exchange by trading volume.
Using OKEx you can trade arbitrage on the spot margin trading interest rate and the perpetual swap trade funding rate.
A strategy for all
Tse said: “With the offering of both spot, margin, and derivatives trading at one spot, OKEx provides users a world-class marketplace which opens the doors to a lot of arbitrage opportunities, saving you the hassle of withdrawing funds from a derivatives exchange to another spot trading platform, also the extra time and costs from blockchain transactions.”
Setting out the details of his strategy, Tse said: “You borrow 1,000 Tether (USDT) of TRX. Short two thirds of it at spot margin trading (666.67 USDT). Then, transfer the remaining third to a perpetual swap account, open 66 swaps which is equal to 660USD,” he said.
“It is almost a delta-neutral strategy. The flow of coins shows a yield of 575 TRX which was 1.66% return at the time.”
Trading in arbitrage on OKEx is made possible because it gives users margin trading and perpetual swap options. Perpetual swap is a new OKEx product that allows customers to speculate on future asset prices, but does not have an expiry date.
Beware of the risk
Despite the potential returns, OKEx was keen to point out that anyone trading in digital assets (or anything else) should always have a plan in place to minimize any potential losses, and said they should never invest more than they could afford to lose.
“Have a risk control plan, stick to it and trade safely and securely. All trading carries risk, and it’s important people understand this before they invest in cryptocurrencies and other digital assets,” they said.
Based out of ‘blockchain island’ Malta which has a favorable regulation regime when it comes to cryptocurrencies and blockchain businesses, OKEx provides a large variety of options for customers looking to trade digital assets, whether they are new to trading or are experienced traders.
Users can trade Bitcoin futures plus hundreds of alt-coin trading pairs.