Skip to main content

Triangular Arbitrage - In 100 words or less

Triangular Arbitrage is a situation that arises when exchange rates do not exactly match up - Exchange Rate Discrepancies.


Say you had k1 units of currency A.

 

When converted to currency B, k1 becomes k2.


When converted to currency C, k2 becomes k3.


Ordinarily, when we convert k3 to currency A, we get k1 back. 

But, in this condition, we would get more than k1!


As cool as this sounds, for an average person, it is hopelessly impractical because these are few and far between. Furthermore, Low profits require large trades done very quickly - a job for automation software.

Labels:

Comments

Post a Comment

Popular posts from this blog

Earworms - In 100 words or less

Earworms are unwanted and catchy tunes that "auto-repeat" in our heads. They can be triggered when we are in a dreamy, meditative, or nostalgic state.  "Catchier" songs are more likely to become earworms; these are generally faster and easier to sing along. An anxious or receptive person is more likely to fall prey to earworms.  Contrary to popular belief, trying to force the song out of your head is one of the worst things to do ; instead, we must passively accept it and move on.  There is a silver lining to all this,  earworms shape your creative process too.
Post a Comment
Read more

Motor Theory of Perception - In 100 words or less

Many of us tap our feet when listening to music. Some of us even wave our hands in a particular manner, representing the dynamics of the song. But why do we do these mostly involuntary actions? The  Motor Theory of Perception   says that music and body movements are deeply rooted in our cognition ; we simulate the motion associated with the sensory stimuli we process, to comprehend it. So, while listening to music, we try to reproduce the sounds that have gone into producing it. We create these mental images in an attempt to be au fait with the music.
Post a Comment
Read more