Arbitrage is the term for when an investor buys and then quickly sells an asset in order to profit from a difference in prices. It is a simple and important process that helps prevent assets from being over- or under-priced in different markets.
Cryptocurrency is still relatively new so at various times arbitrage opportunities can become available.
There are many exchanges and many coins.
Cryptocurrency arbitrage can still be an opportunity for some of the smaller cryptocurrency.
If particular coins get very hot then highly profitable arbitrage opportunities can emerge. When Litecoin had a boom a few months ago, that created pricing differences between different exchanges.
* When China closed its local cryptocurrency exchanges late last year, an underground ecosystem of bitcoin “mules” and peer-to-peer platforms sprung up to allow bitcoin trading to thrive, away from regulators’ watchful eyes. The premium for bitcoins in China has fallen to around 7 percent or less as a flood of bitcoin mules.
You need to use tools to compare many coins and to create alerts when the margins become very large.
You will also need to make sure there is sufficient volumes at the two exchanges to be sure that the buying and selling can be done.