Cross Exchange Arbitrage Interview Guide
Cross-exchange arbitrage interview guide for fragmented venues, fees, latency, inventory, transfer constraints, settlement, and risk.
Candidates explaining price differences between crypto exchanges and execution constraints.
Venue fragmentation creates spreads
Different exchanges can show different prices because of access, fees, liquidity, latency, regional demand, and transfer constraints. Not every spread is tradable.
Both legs need execution certainty
A cross-exchange trade can fail if one leg fills and the other misses. Discuss fill probability, hedge plans, and position limits.
Concrete example
Buying on venue A and selling on venue B may require inventory already on both venues. Waiting for transfers can turn an apparent arbitrage into market risk.
Data normalization affects detection
Symbols, timestamps, depth, fees, and venue health must be comparable before ranking opportunities across exchanges or sizing a trade.
Common mistakes
Candidates often compare last traded prices. Use executable bid and ask, available size, fees, and latency before judging the spread.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.