High volatility increases price fluctuations, creating more opportunities for arbitrage traders to take advantage of price differences between brokers.
High volatility increases price fluctuations, creating more opportunities for arbitrage traders to take advantage of price differences between brokers.
During major news events, brokers’ servers may become overloaded due to high trading volumes, leading to lagging quotes and delayed execution times.
Lagging quotes happen because brokers struggle to process the large number of client orders, leading to execution delays and potential arbitrage opportunities.
The best times are during high-impact news releases and at the opening of the European and American trading sessions when market activity is at its peak.
News arbitrage is a strategy where traders exploit price discrepancies caused by market reactions to economic news. Many traders prefer it because of its high profitability during these events.
These sessions see increased trading activity, leading to rapid price movements and potential inefficiencies in brokers’ pricing, making them ideal for arbitrage.
While profitable, trading during news events carries risks such as slippage, order rejections, and widened spreads, which can reduce potential profits.
By using high-speed execution and monitoring broker response times, traders can capitalize on temporary inefficiencies in pricing caused by server overload FAQ Broker Behavior And Risk Management In Arbitrage Trading