Please note that algo trading will be implemented in Q1 of 2019.
Arbitrage is one of the strategies for algo trading. Algorithmic trading, in simplest terms, means using a program to place trades instead of placing them yourself manually. There are many ways to use code to trade for you. Arbitrage is buying from one exchange while simultaneously selling at another exchange when there is a price difference.
So, how does arbitrage happen on our platform?
Covesting platform is already connected to multiple exchanges. These exchanges have many identical assets. At any one time, these assets do not have identical prices. Hence the opportunity for risk free profits.
The algorithm trade engine of Covesting will be monitoring these pairs and executing arbitrage trades when the price differences yield net profits after deducting costs. Note that these trades are instantaneously executed on 2 exchanges. They are risk free.
Please note that it will require COV as a “buy-in” to participate proportionally to the total community stake, meaning that user's share of arbitrage profits generated by Covesting will be calculated proportionally to the amount of COV staked.