Selecting an Arbitrage Service Provider

When choosing a company to do crypto arbitrage trading with, you need to consider some fundamental aspects. With several service providers to choose from, here are some important questions to ask before choosing yours.

1. What is the minimum investment amount?

The minimum investment amount will differ per company, however it is important to understand whether your planned amount qualifies for the minimum level of investment. Most companies require a minimum investment of R100 000 but it is worth noting that the higher your initial investment, the greater your returns will be.

2. What are the fees?

Fees differ on a company-by-company basis. Standard fees to be aware of include a R500 SWIFT fee, for bank processing, and a percentage of the initial amount in service fees. Certain service providers charge an additional fee on the returns of each trade cycle, however, FiveWest does not charge this fee.

3. How long does it take to get my money back?

Once your account has been set up, and the initial capital deposit has been made, it can take anywhere from a few days or weeks for all of your trades to be completed. This window is subject to vary according to the amount being traded and prevailing market conditions.

4. How many times can I trade?

The number of times one can trade crypto arbitrage depends on the amount being traded. The regulatory conditions for arbitrage in South Africa grant each South African a total of R11 million per year to trade abroad. Thus, the number of trades that can be executed is contingent on the amount being traded, per trade. For entry-level investments of R100 000, this means that a total of 110 trades can be executed per year, should investors decided to use their full Foreign Investment Allowance (FIA).

5. What licenses do you have?

Crypto arbitrage trading necessitates the transfer of funds across international borders. Ensuring that your arbitrage service provider is fully licensed and authorised to execute these transfers, across international borders and on your behalf, is paramount to secure arbitrage. FiveWest is a fully authorised FSP (51619), SARB mandated to facilitate international payments, and holds a systems operator license from the Payments Association of South Africa.

Crypto arbitrage is a low-risk trading strategy that presents a unique opportunity for South African investors. With an array of service providers to choose from, it is crucial that prospective investors are equipped with the necessary knowledge and understanding of the key considerations when evaluating various service providers.