Kolmiarbitraasi

Kolmiarbitraasi, also known as triangular arbitrage, is a trading strategy that exploits discrepancies in exchange rates between three different currencies. It involves executing a series of trades to profit from the differences in the quoted prices of these currencies. The core principle is that if the exchange rates between three currencies are not perfectly aligned, a risk-free profit can be made by converting one currency into another, then that currency into a third, and finally back to the original currency.

For example, imagine you have US dollars (USD) and you observe the following exchange rates: EUR/USD is 1.10, GBP/EUR is 0.85, and GBP/USD is 1.30. If you convert 1000 USD to EUR, you get approximately 909.09 EUR. Then, converting this EUR to GBP at 0.85 gives you about 772.73 GBP. Finally, converting this GBP back to USD at 1.30 would result in approximately 1004.55 USD. This small difference of 4.55 USD represents the profit from the triangular arbitrage.

These opportunities arise due to minor inefficiencies in the foreign exchange market. Sophisticated trading algorithms and high-frequency trading systems are often employed to detect and capitalize on these fleeting discrepancies. While the profit margins on individual trades are typically very small, the volume of transactions can lead to significant gains. The risk associated with kolmiarbitraasi is generally considered low because the trades are executed almost simultaneously, minimizing exposure to currency fluctuations. However, the window of opportunity is often extremely short, and transaction costs can erode potential profits if not carefully managed.