Forex Arbitrage Calculator User's Guide
Forex Arbitrage Calculator allows to determine risk free arbitrage opportunities on forex cross rates.
1.Main window.
1.1 Rates
Click on the arrows (buttons under "Rates") to move rates up or down. The bid/ask rates are displayed (boxes under "Bid" and "Ask") with the given spreads. You may change rates also manually by entering a new bid rate into the box under "Bid".
1.2 Spreads
Click on the arrows (buttons under "Spreads") to move spreads up or down.
1.3 Indicator
Indicator shows profit/loss from the arbitrage with the current rates. In the box under "Bid" is shown profit/loss from the following operations: buy first and second instruments and sell third instrument. In the box under "Ask" is shown profit/loss from the following operations: sell first and second instruments and buy third instrument
1.4 Action
This box shows the recommended action: "Wait" -there is no a risk-free arbitrage opportunity, "Buy"- there is a risk-free arbitrage opportunity in buying third instrument and selling first and second instruments, "Sell"= there is a risk-free arbitrage opportunity in selling third instrument and buying first and second instruments.
Examples.
In situation shown on the picture above, exists risk-free arbitrage opportunity (buy 3rd, sell 1st and 2nd instruments) with estimated profit equal to $13.1 on mini contracts.
Indeed buying 100,000 EUR for $118,370 (10 mini lots or a one standard lot), and selling 100,000 EUR for 72,310 GBP, and
selling 72,310 GBP for $118,501 gives zero exposures in EUR and GBP with profit of $131. Many online forex brokers offer 0.5% margin, so it is possible to implement this arbitrage with $1,500, which gives risk-free 8.7% of profitability on a one operation.
2. Settings window
This window allows to customize default settings for the main window.
