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The break-even calculator works out the move needed just to cover your costs on a trade.
What is included
- How the bot works, step by step
- The arithmetic of the ladder or grid, with tables
- How it fails and how to test it honestly
- The tools that check the numbers
Who it is for
- People thinking of using this kind of bot
- People already running one and wanting a stress test
- Readers comparing bot types before buying
- Not advice, and not a recommendation to use one
Key facts
- Triangular arbitrage trades three markets in a loop, for example currency A to B to C and back to A. If the three prices are slightly out of line, you end with more of A than you began with.
- Each leg pays a fee, so the gap must be bigger than the three fees combined. At a 0.1 percent fee per leg the break-even gap is 0.301 percent (calculated by us on 28 Oct 2026, exact).
- In the made-up example below a 0.667 percent gross gap becomes 0.365% net at 0.1 percent fees, and -0.237% at 0.3 percent.
- The trades are not simultaneous. By the time the second and third legs fill, the prices may have moved, and the gap can turn into a loss.
- Such gaps are small, are closed fast by other traders, and are real only if the whole loop can fill. A backtest that assumes all three fill at the quoted prices overstates the result.
What triangular arbitrage is
Three markets share assets: for example A/B, B/C and A/C. If you convert A to B, B to C and C back to A, you should end with the same amount of A, apart from costs. When the three quoted prices are slightly out of line, the loop returns a little more or less. A bot that watches the three prices and trades the loop when it returns more is a triangular arbitrage bot. It is a bet on speed and on tiny gaps, not on the direction of the market.
A worked example with made-up prices
Start with $1000.00 of asset A. Leg 1 buys asset B at a price of 50,000 A per B, giving 0.0200 B. Leg 2 trades B for asset C at 0.06 B per C, giving 0.3333 C. Leg 3 sells C at 3,020 A per C, giving $1006.67. The gross gain is $6.67, which is 0.667%. These prices are made up and chosen to show the arithmetic.
Net return = (end / start) x (1 - fee)^3 - 1
Break-even gross gap = 1 / (1 - fee)^3 - 1
| Fee per leg | Break-even gap | Net on this example | Net with 0.1% slippage per leg |
|---|---|---|---|
| 0.05% | 0.150% | 0.516% | 0.214% |
| 0.1% | 0.301% | 0.365% | 0.064% |
| 0.2% | 0.602% | 0.064% | -0.236% |
| 0.3% | 0.905% | -0.237% | -0.536% |
The table reads one way: the fees alone take almost half the gain at 0.1 percent per leg, and a further 0.1 percent of slippage on each leg leaves almost nothing. Slippage here is the gap between the quoted price and the fill, and it is a cost the quote hides. See slippage.
How a triangular arbitrage bot fails
- Leg risk. The three trades happen one after another. If leg 1 and leg 2 fill and leg 3 does not, the bot is left holding an asset that can move against it. The loop is meant to carry no price risk, but a half-finished loop is a position.
- The quote is not the fill. The visible price may be for a small size. A larger order walks through the book and gets a worse average price. The spread on each pair is paid whenever a leg crosses it.
- Latency. The gap lasts a short time and other traders see it too. A slower bot arrives after the gap has closed and trades the loop at a loss.
- Fees decide it. The break-even gap grows with every leg. A fee schedule that looks small, like 0.1 percent, takes about 0.301 percent from the loop, and the gaps seen are often smaller.
- Funding and limits. Capital sits on the venue. Withdrawal or trading limits, outages and a frozen market can trap it mid-loop.
How to check one honestly
Count the real fee on every leg, including the order type the bot would use. Add a slippage allowance for each leg. Compute the break-even gap and compare it with the gaps the bot actually sees over time, not the best one. Then check the fill rate: how often all three legs complete at the planned prices. A test that assumes every leg fills is the same trap as the perfect fills in a backtest.
What this page does not tell you
It does not say that triangular arbitrage works or does not work for you. It shows the arithmetic and the failure modes. Whether a gap exists depends on the venue and the moment, which no page can know. For the cost of ordinary trading see the break-even calculator, and for a related fee story on grids read grid bot fees and costs.
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FAQ
Frequently Asked Questions
What is triangular arbitrage?
Trading three markets in a loop, for example A to B to C and back to A, to end with more A than you started with when the three prices are slightly out of line.
Does triangular arbitrage carry no risk?
It does carry risk. The three legs fill one after another, so a half-finished loop leaves a position that can move against you, and fees, slippage and speed all cut the gain.
How big must the gap be to break even?
It must exceed the combined fees on all three legs. With 0.1 percent per leg the exact break-even gap is about 0.30 percent, before any slippage.
Why do these gaps disappear?
Other traders and bots trade them away, usually faster than a slow bot can. By the time a slower bot fills the third leg the gap may be gone.
Can a backtest show whether it works?
Only a careful one. It must use fills that really would have happened for all three legs, with the full fees. A test that assumes perfect fills overstates the result.
Are the numbers on this page real?
Example numbers are made up to show how the maths works, and the page says so. A figure only counts as exact when the page says it was calculated on a stated date. Nothing you enter in a calculator leaves your browser.
Can I use this to decide whether to run a bot?
It can show whether a bot's numbers hold together and how much an account can lose. It cannot say what the market will do, and it is not advice. Use it to ask better questions, then read the terms of your own broker or exchange.
Is this financial advice?
No. It is general education about how the arithmetic works. The prices are made up and your fees and venue will differ.
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