finding-arbitrage-opportunities

Finding Arbitrage Opportunities

Overview

This skill detects and analyzes arbitrage opportunities across cryptocurrency exchanges and DeFi protocols. It aggregates prices from multiple sources, calculates net profit after fees and costs, and identifies both direct and triangular arbitrage paths.

Prerequisites

Before using this skill, ensure you have:

• Python 3.9+ with httpx, rich, and networkx packages
• Internet access for API calls (no API keys required for basic use)
• Optional: Exchange API keys for real-time order book access
• Understanding of arbitrage concepts and trading fees

Instructions

Step 1: Configure Data Sources

Configure your price sources in {baseDir}/config/settings.yaml:

# Primary data sources
data_sources:
  coingecko:
    enabled: true
    base_url: "https://api.coingecko.com/api/v3"
    rate_limit: 10  # calls per minute (free tier)

exchanges:
  - binance
  - coinbase
  - kraken
  - kucoin
  - okx

Or use environment variables for API keys:

export BINANCE_API_KEY="your-key"
export COINBASE_API_KEY="your-key"

Step 2: Quick Spread Scan

Scan for arbitrage opportunities on a specific pair:

python {baseDir}/scripts/arb_finder.py scan ETH USDC

This shows:

• Current prices on each exchange
• Spread percentage
• Estimated profit after fees
• Recommended action

Step 3: Multi-Exchange Comparison

Compare prices across specific exchanges:

python {baseDir}/scripts/arb_finder.py scan ETH USDC \
  --exchanges binance,coinbase,kraken,kucoin,okx

Output includes:

Exchange	Bid	Ask	Spread	Net Profit
Binance	2541.20	2541.50	0.01%	-
Coinbase	2543.80	2544.10	0.01%	+$2.30

Step 4: DEX Price Comparison

Scan decentralized exchanges for arbitrage:

python {baseDir}/scripts/arb_finder.py scan ETH USDC --dex-only

Compares:

• Uniswap V3
• SushiSwap
• Curve
• Balancer

Includes gas cost estimates for on-chain execution.

Step 5: Triangular Arbitrage Discovery

Find profitable circular paths within an exchange:

python {baseDir}/scripts/arb_finder.py triangular binance --min-profit 0.5

Example output:

Path: ETH → BTC → USDT → ETH
Gross: +0.82%
Fees:  -0.30% (3 × 0.10%)
─────────────────────────────
Net:   +0.52%

Step 6: Cross-Chain Opportunities

Compare prices across different blockchains:

python {baseDir}/scripts/arb_finder.py cross-chain USDC \
  --chains ethereum,polygon,arbitrum

Shows:

• Price on each chain
• Bridge fees and times
• Net profit after bridging

Step 7: Real-Time Monitoring

Continuously monitor for opportunities:

python {baseDir}/scripts/arb_finder.py monitor ETH USDC \
  --threshold 0.5 \
  --interval 5

Alerts when spread exceeds threshold:

[ALERT] ETH/USDC spread 0.62% (Binance → Coinbase)
        Buy: $2,541.20 | Sell: $2,556.98
        Net Profit: +$12.34 (after fees)

Step 8: Profit Calculator

Calculate exact profit for a trade:

python {baseDir}/scripts/arb_finder.py calc \
  --buy-exchange binance \
  --sell-exchange coinbase \
  --pair ETH/USDC \
  --amount 10

Shows detailed breakdown:

• Gross profit
• Trading fees (both exchanges)
• Withdrawal fees
• Net profit
• Breakeven spread

Step 9: JSON Export

Export opportunities for bot integration:

python {baseDir}/scripts/arb_finder.py scan ETH USDC --output json > opportunities.json

Output

The scanner provides:

Quick Mode (default):

• Best opportunity with profit estimate
• Buy/sell recommendation
• Risk level indicator

Detailed Mode (--detailed):

• All exchange prices
• Fee breakdown
• Slippage estimates
• Historical spread context

Monitor Mode:

• Real-time updates
• Threshold alerts
• Trend indicators

Supported Exchanges

Centralized Exchanges (CEX)

Exchange	Maker Fee	Taker Fee	Withdrawal
Binance	0.10%	0.10%	Variable
Coinbase	0.40%	0.60%	Variable
Kraken	0.16%	0.26%	Variable
KuCoin	0.10%	0.10%	Variable
OKX	0.08%	0.10%	Variable

Decentralized Exchanges (DEX)

DEX	Fee Range	Gas (ETH)	Chains
Uniswap V3	0.01-1%	~150k	ETH, Polygon, Arbitrum
SushiSwap	0.30%	~150k	Multi-chain
Curve	0.04%	~200k	ETH, Polygon, Arbitrum
Balancer	0.01-10%	~180k	ETH, Polygon, Arbitrum

Error Handling

See {baseDir}/references/errors.md for comprehensive error handling.

Common issues:

• Rate Limited: Reduce polling frequency or use API key
• Stale Prices: Data older than 10s flagged with warning
• No Spread: All exchanges at similar prices (efficient market)
• Insufficient Liquidity: Trade size exceeds order book depth

Examples

See {baseDir}/references/examples.md for detailed examples including:

• ETH/USDC CEX arbitrage scan
• DEX triangular arbitrage discovery
• Cross-chain USDC opportunity
• Automated monitoring setup

Educational Disclaimer

FOR EDUCATIONAL PURPOSES ONLY

Arbitrage trading involves significant risks:

• Opportunities may disappear before execution
• Price data may be delayed or inaccurate
• Fees can exceed profits on small trades
• Market conditions change rapidly

This tool provides analysis only. Do not trade without understanding the risks.

Resources

• CoinGecko API - Free price data
• CCXT Library - Unified exchange API
• Uniswap Subgraph - DEX data
• Gas Tracker - Ethereum gas prices