# Can't understand arbitrage profit calculation

Found the formula in the following link. I can't understand with my knowledge. Can anybody explain me with an example?

``````profit = ExchangeA_sell * (1 - ExchangeA_fee) - ExchangeB_buy * (1 + ExchangeB_fee).
``````

One more thing, Is this formula good for all exchanges? Cryptsy and Bter have calculated differently their net total. Bter sell offer is different from cryptsy sell offer. In Bter the trade fee is deducted just opposite to cryptsy in terms of buy and sell currency?

• I explained it in more detail here. Maybe it is more clarifying Jul 1, 2014 at 13:48
• I'm not quite sure what you mean in the other questions. The net total does not matter at all for arbitrage. And what in the sell offer is different? The offers itself are of course different, because it are different exchanges. I tried to explain something similiar as your last question here. But please rephrase Jul 1, 2014 at 14:02
• @Mathias711 - bitcoin.stackexchange.com/questions/28263/…. This is my problem. I am stuck at here.
– Jsd
Jul 2, 2014 at 9:11
• I saw the question, I tried to read it, but important stuff came through. I will comment my first idea of it Jul 2, 2014 at 9:12

As explained by http://www.investopedia.com/terms/p/profit.asp:

profit = total revenue - total expenses

or in plain English:

``````profit = (what you had received after selling all your coins) - (what you had paid to buy your coins)
``````

so, for example:

If you had spent \$1000 for Bitcoin priced at \$500/BTC on exchange A, and say the fee is 1%, you will received

``````\$1000/\$500*(1-0.01) = 1.98 BTC
``````

If you move and sell your 1.98 BTC at for \$600/BTC on exchange B, which also charges a 1% fee, you will receive

``````1.98*\$600*(1-0.01) = \$1176.12
``````

``````\$1176.12 - \$1000 = \$176.12