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The Arbitrage Executor captures price discrepancies between markets by simultaneously executing buy and sell orders, particularly useful for CEX-DEX arbitrage.

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Overview

PropertyValue
Position TypeSpot
keep_positionConfigurable
Use CasesCEX-DEX arbitrage, cross-market spreads

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Configuration

from hummingbot.strategy_v2.executors.arbitrage_executor.data_types import (
    ArbitrageExecutorConfig,
    ExchangePair,
)

config = ArbitrageExecutorConfig(
    controller_id="my-agent",
    buying_market=ExchangePair(
        exchange="uniswap_polygon_mainnet",
        trading_pair="WMATIC-USDT",
    ),
    selling_market=ExchangePair(
        exchange="binance",
        trading_pair="MATIC-USDT",
    ),
    order_amount=Decimal("500"),        # In base asset
    min_profitability=Decimal("0.004"), # 0.4% minimum
)

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Parameters

ParameterDescription
buying_marketExchange and pair for buy side
selling_marketExchange and pair for sell side
order_amountAmount in base asset
min_profitabilityMinimum profit threshold

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How It Works

  1. Validation: Confirms trading pairs are interchangeable
  2. Price Comparison: Monitors prices on both markets
  3. Profitability Check: Calculates profit after all fees
  4. Simultaneous Execution: Places both orders when profitable
  5. Tracking: Records fill prices and actual profit

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CEX-DEX Arbitrage

Common use case is arbitraging between centralized and decentralized exchanges: 
cex_dex_arb = ArbitrageExecutorConfig(
    controller_id="cex-dex-arb",
    buying_market=ExchangePair(
        exchange="jupiter",  # DEX
        trading_pair="SOL-USDC",
    ),
    selling_market=ExchangePair(
        exchange="binance",  # CEX
        trading_pair="SOL-USDT",
    ),
    order_amount=Decimal("10"),
    min_profitability=Decimal("0.005"),
)

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Token Interchangeability

The executor validates tokens are equivalent:
CheckExample
Same tokenMATIC = MATIC
Wrapped equivalentsETH = WETH
Stablecoin equivalentsUSDT ≈ USDC (configurable)

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Profitability Formula

Buy Cost = Buy Amount × Buy Price + Buy Fees + Gas
Sell Revenue = Sell Amount × Sell Price - Sell Fees

Net Profit = Sell Revenue - Buy Cost
Profitability = Net Profit / Buy Cost

Execute if: Profitability > min_profitability

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Example: Polygon MATIC Arbitrage

matic_arb = ArbitrageExecutorConfig(
    controller_id="matic-arb",
    buying_market=ExchangePair(
        exchange="uniswap_polygon_mainnet",
        trading_pair="WMATIC-USDT",
    ),
    selling_market=ExchangePair(
        exchange="binance",
        trading_pair="MATIC-USDT",
    ),
    order_amount=Decimal("1000"),
    min_profitability=Decimal("0.004"),
)

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Considerations

FactorImpact
Gas CostsDEX trades have variable gas costs
SlippageLarge orders may move price
Bridge TimeCross-chain requires bridging
LatencySpeed matters for volatile spreads