> For the complete documentation index, see [llms.txt](https://docs.axis.to/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.axis.to/susdx-the-rewards-vault/how-axis-earns-yield/trading-strategies/cross-currency-arbitrage.md). # Cross-Currency Arbitrage Cross-currency arbitrage is triangular. The desk combines legs such as an asset priced in country A's currency and country A's currency priced against country B's currency. Chained together, these legs form a **synthetic FX pair** that can be priced differently than the same pair in traditional FX markets. The desk hedges out the FX exposure and seeks to capture the difference. The approach applies to any asset traded across jurisdictions and currencies, BTC is only one example. The intended spread only becomes comparable after the quote currencies are converted or hedged. ## Illustrative structure Suppose BTC can be bought in country A's currency, while the currency leg between country A and country B implies a different price than the traditional FX cross would suggest. A paired structure trades the two legs and then hedges or converts the resulting FX exposure to isolate the synthetic-versus-traditional difference. The visible local-market premium is not the realized return. The calculation must include: * the executable exchange rate between the two currencies; * FX hedge or conversion costs; * trading fees and market impact in each market; * transfer, banking, custody, and settlement costs; * the time during which the asset and currency legs can move independently. ## Why the premium can exist Local demand, capital controls, banking access, settlement speed, market hours, and uneven liquidity can cause the same asset to trade at different currency-adjusted prices. Those frictions can also prevent the spread from being captured. ## Residual risks Cross-currency arbitrage remains exposed to FX hedge mismatch, local-market liquidity, capital controls, banking or counterparty disruption, delayed settlement, trapped funds, partial fills, and price movement between legs. Read [Delta Neutrality](/susdx-the-rewards-vault/how-axis-earns-yield/trading-strategies/delta-neutrality.md) for the hedge boundary and [Market & Trading Risk](/risk/market-trading-risk.md) for broader failure modes. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.axis.to/susdx-the-rewards-vault/how-axis-earns-yield/trading-strategies/cross-currency-arbitrage.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.