A trading strategy profiting from price differences across multiple related assets. This method involves executing a sequence of trades, often more complex than simple two-asset arbitrage, to capitalize on mispricings. It frequently applies to derivatives or structured products where the value relationships are interdependent. Successful execution requires sophisticated analytical models and rapid transaction capabilities.
Context
Combinatorial arbitrage gains relevance in crypto markets with the proliferation of various derivative products and complex DeFi strategies. News articles might detail how traders utilize these techniques to extract value from interconnected liquidity pools. The complexity of these operations often indicates the growing sophistication of market participants and automated trading systems.
An LLM-driven semantic methodology maps complex logical dependencies between prediction markets, revealing $40M in extractable value and systemic inefficiency.
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