Hi everyone. I think I've finally found the Holy Grail of trading.
Arbitrageurs, of course, already know all about this and have been making money from it for a long time... They can skip the first method ))
One option is to work with arbitrage setups across different markets, capitalizing on deviations of the fair price from its norm. What do I mean? On MOEX and in forex, sanctions against Russia have recently led to some very interesting price deviations in gold, silver, and currencies from normal market values.
Yes, in principle, these kinds of discrepancies exist on any exchange simply because of inefficient market makers. Here's one example of an inefficiency with an option #BNB although maybe the market maker intended it that way.
What's more, these discrepancies can reach 3–5%, or even 10%. They only last for a short time. Arbitrageurs take advantage of them. They open 2 or 3 positions simultaneously when a discrepancy like this occurs. One position, for example, is on Forex: if the currency's exchange rate is higher there, you sell it; another position is opened on MOEX, where you buy it. A couple of days or even hours later, when the discrepancy closes—and the great thing about these positions is that this is 100% certain to happen—you can close both positions. One will show a loss and the other a profit. But you'll be left with the difference between the profit and the loss: 1–3–5%.
Some people will say that 1% is nothing... But you can make a lot of these trades. There are a lot of discrepancies and inefficiencies right now, both in crypto and on MOEX. And the great thing about these trades is that you can use almost all your capital, because the position is bound to return to normal, and you earn regardless of which way the price moves.
Plus, the ability to use prop firm funds and leverage on Forex can sometimes boost your +1% to 10–15%, which is already interesting.
The tricky part of this trading method is calculating all the fees and non-trading instructions involved in transferring money between different accounts. When trading on MOEX, you also need to account for repo transactions when carrying a position overnight, and avoid funding fees and unexpected futures expirations. You also need to know the ins and outs of trading Forex with your broker....
Overall, the task mostly comes down to setting up all the tools, connecting screeners that show discrepancies, setting up accounts with brokers, and studying their fees. In other words, these aren't trading operations; they're preparations for trading with guaranteed profit.
It's tricky... yes, there are a few difficulties at first. Trading on your phone isn't really going to work... But it's worth it... and you'll need some initial capital.
From there, you can keep growing until you hit the market's ceiling—the volume the market can handle. How much capital do you need to get started?
Ideally, a few thousand dollars to start with, so it's worthwhile. But you can also try with less capital, setting up the system and studying the pairings and inefficiencies.
In any case, there's a minimum entry threshold... Even opening an account with some brokers requires a certain amount. Screeners are mostly paid services too. And you'll need some money to buy a TradingView license so you can see charts of discrepancies—around $300–350.
Option 2. Options...
Oh, this is a whole new world... At first, it makes your head explode... This is the most difficult trading instrument for beginners. But once you get the hang of it, it's a fantastic instrument...
Can you imagine being able to buy the right to purchase 1 Ether at a certain price for, say, $5? And then sell that right to buy Ether for $500 if Ether suddenly rises from $1,900 to $2,600, as it did recently... That's what an option is!!! In simple terms. I'll explain how to find them, where to buy them, what strategies you can use, and so on a little later. For now, here are a few pictures...
Remember how Ether went up 30% in the last 2 months? From 1,850 to 2,700???
Now take a look at what happened to Ether options over that same period.
What do you think? +700%, or a rise from 0.7 to 36 in a day? And the funniest thing is, if you'd bought an option for $0.7, even if Ether had fallen to $1,000, you wouldn't have lost more than $0.7. But if Ether had risen to 2,700, like in the screenshots, your $0.7 option would have been worth $35. You might not have sold it for $35, but $30 would have been perfectly possible. That's 30x in a month, or even a week!!! And here are some fresh options... What do you think of that move? 3x—that's 300% in a month!!! But I've seen 33x too!!!
Are options difficult? Of course they are... there are lots of challenges... starting with the terminology. But is it worth it? What do you think?