---
title: 'Do Arbitrage Opportunities Still Exist in 2023?'
source: 'https://youtube.com/watch?v=5-TQE0_Wwfc'
video_id: '5-TQE0_Wwfc'
date: 2026-07-18
duration_sec: 362
channel: 'UKspreadbetting'
---

# Do Arbitrage Opportunities Still Exist in 2023?

> Source: [Do Arbitrage Opportunities Still Exist in 2023?](https://youtube.com/watch?v=5-TQE0_Wwfc)

## Summary

This video explores whether arbitrage opportunities still exist for retail traders in modern markets. The speaker explains the concept of arbitrage, reviews historical examples, and argues that technological advances have largely eliminated profitable arbitrage for retail traders in liquid markets, though niche opportunities may remain in illiquid assets.

### Key Points

- **Definition of Arbitrage** [00:16] — Arbitrage is buying an asset at one price and immediately selling it at a higher price on another venue or market point, aiming for a risk-free profit, though counterparty risk exists.
- **Historical Example: Nick Leeson** [00:58] — Nick Leeson used arbitrage on Japanese exchange futures, buying on one exchange and selling on another, using runners and telephones to exploit price differences.
- **Index Futures Arbitrage** [01:26] — Traders exploited discrepancies between index futures (e.g., FTSE 100) and the underlying basket of stocks by buying the cheaper side and hedging with the other, capturing small price differences.
- **Triangulation in Forex** [02:38] — Banks triangulated currency pairs (e.g., EUR/USD, GBP/USD, GBP/EUR) to find mispriced quotes and profit from synthetic price differences.
- **Margins Shrinking with Technology** [03:19] — As technology improved, arbitrage margins shrank dramatically. Big banks invest heavily in tech to capture tiny slivers of profit, leaving little for retail traders.
- **Retail Traders: Limited Opportunities** [03:34] — For retail traders, arbitrage in liquid markets (indices, forex, interest rate futures) is nearly impossible due to speed and technology disadvantages.
- **Potential Niche Opportunities** [04:02] — Opportunities may exist in low-volume, illiquid assets where big banks are not interested, such as certain cryptocurrencies or low-liquidity ADRs.
- **Focus on Directional Trading** [05:13] — The speaker advises retail traders to focus on directional trading where they can develop an edge, rather than chasing arbitrage.

### Conclusion

Arbitrage opportunities in liquid markets have largely disappeared for retail traders due to technological advancements and competition from big banks. However, niche opportunities may still exist in illiquid assets, but retail traders are better off focusing on directional trading strategies.

## Transcript

trade and look at some of the other arbitrage opportunities that have arbitrage opportunities that have happened throughout the years stay tuned
for joining me alright so an arbitrage opportunity is really buying one asset immediately so you've got the same underlying asset but there's a difference in price from one venue to another or one pacific point to another
so the words sound buying something and it's valued at X and immediately is value elsewhere X plus a few basis points then I can arbitrage those back and buy that and sell and I can make a risk-free profit now it's not
transactional wrist is other risk exposed to it as well but in an ultimate counterparty risk but ultimately instead of trading and looking for directional move and trying to protect pretty direction you're saying hey this is a
risk-free profit here although the risk is capped profit and I can do this now some of the more well-known arbitrage opportunities that have happened were if he watched rogue trader with Nick Leeson he used arbitrage futures on the
Japanese exchanges so he would buy one one and it would sell it on the other price so we'd every infrastructure in price he'd have a runner and a telephone etc and have the ability to be able to do that so there was that then we assume
you started get electronic trading you had the arbitrage people who are betrayed in indices so the index futures like footsie 100 was made up of a basket of hundred stocks and of course it's based on that valuation plus this fixed
interest rate of times because Bari which are known but the price is changing daily is the price of each instrument so what they would do is when the footsie futures went out of line with the valuation let's say someone
and it pushed up and these was still the basket of stocks were still sitting immediately and then sell footsie futures to hedge it and capture that little efficiency so the value of those basket of stocks might be footsie
futures price and then the footsie futures price would be say less price would be X plus a few basis points by selling that and buying that they capture that in between then either way until expiry and expire that into the
constituents or their what's the article the other way and iron how now that was technology started getting better and better the distance between those two getting smaller and smaller and smaller and so now that's completely ironed out
another one is triangulating the currency pairs so it's a little bit more complicated but you know parent pairs are crosses right euro US dollar got gbp/usd then you've got GBP euro so you got all these in a ways that you can
triangulate them so ultimately what good the banks were doing is they would see when one quote was out of sync with the rest of it they work out or the synthetic price was for that based on buying and selling other currency pairs
and then I've set that straight away with the currency pair that was out of points on that or point in one of a baseball some real Slytherin margin and arbitrage margins has gone from in a reasonable probably I don't know what
right the way down to kind of really slithers of margins that are almost who's got the best tech and of course if there's free money on the table everyone's just piling money into resources to get there so there comes a
question is there any opportunities left for as retail traders and the answer to for as retail traders and the answer to that is probably not now if it comes down to a technology thing then there's probably not gonna be a opportunity the
opportunity guys is when there's not enough money for the big banks to get involved in so if you ever saw some asset that was in a very low volume very illiquid but perhaps there's enough to make it worthwhile for you maybe it's a
something then and that was all that was in it then that there might be an interested in now they're not interested in doing stuff like that so maybe cryptocurrency white developed an arbiter might develop arbitrage
opportunity somewhere some kind of coin on one exchange some kind of coin on the it can correct me guys in the comment section below but perhaps is an you're looking for an arbitrator for your two but then again is a transaction
account you're going to take into account your execution there's all sorts of things it's not just a clear-cut thing but the point is is there anything that's got a big meet sorry ie liquidity our interest rate futures ie index
futures I forex I anything like that there's no opportunity for as traders we're sitting there with our desktop machines or wherever it is and our broadband lines and how quickly are we're never going to be the big guys so
forget about that kind of thing but you know maybe on lower tier stuff was not volume if there is some thorny little thing maybe there's a low liquidity ADR somewhere against another start underlying stock possibly but in my
putting that resources and those effort into improving your kind of directional because that's where we can have our edge we don't have been the market all the time we can't find a spot that suits us we can iron out an edge in that but
opportunities out there someone's nailing them away and they keep it quiet know because of the quality's not that much anyways that's my thoughts on arbitrage in the modern day and after the retail trader take care is my you're
the retail trader take care is my you're overdoing see you next Bobby