Don Transaction Costs eat All Of The Profits?
Although it seems that a deposit or withdrawal fee of up to 3% would negate most arbitrage profits, this is only true if you pay the fee for every single trade you make. This is obviously not how professional traders operate. An active trader will make deposits at his bookmakers, incurring fees at some of them. He will then start trading. As his trades settle, some bookmaker accounts will lose money whilst others gain. He will then continue to trade and after the next round of trades settle, the money will have moved around again. In most cases, the movement of money which is created by the winning and losing bets will mean that he will not have to pay to deposit at his bookmakers for some time. This means that the initial fees he paid have been absorbed by tens, if not hundreds, of arbitrage trades and thus become negligible compared to the profits generated. It is important to consider your arbitrage project as an ongoing business, not a series of unconnected trades. The more trading
