Triangular Arbitrage with Bid and Ask Quotes

Triangular arbitrage opportunities can be easily identified using bid and ask quotes. In this article I describe formulas for computing triangular arbitrage using bid and ask quotes. It is worth noting that the triangular arbitrage computation using bid and ask prices is a bit more complex than simply using close prices.

Continue reading “Triangular Arbitrage with Bid and Ask Quotes”


The basics of Triangular Arbitrage

Triangular arbitrage involves placing offsetting transactions in three forex currencies to exploit a market inefficiency for a theoretical risk free trade. In practice, there is substantial execution risk in employing a triangular arbitrage or tri arb strategy which may make it difficult to profit for retail traders. However, a knowledge of triangular arbitrage mechanics can enable forex traders to understand better how market prices self-regulate.

Continue reading “The basics of Triangular Arbitrage”