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You can also short on poloniex

But not BTC/USD, only BTC/USDT, opening another can of worms.

You don’t need to short BTC/USD you just need to be able to short. You can always convert to USD after your arbitrage gains in BTC, which I do and have done.

Suppose on exchange X, BTC/USD trades at 12000, on exchange Y, BTC/USDT at 10000. You sell an expensive BTC on X (for 12000 USD), you buy a cheap BTC on Y (for 10000 USDT).

Now they nicely converge to 20000. You buy back a BTC on X, giving you a loss of 8000 USD. You sell a BTC on Y, giving you a nice 10000 USDT gain.

So, you realised and locked in the projected 2000 USD arb profits - oh, assuming the 10000 USDT you got on Y can actually be exchanged for 10000 USD. You have exposure now to USDT/USD, and your arb profit (in USD) depends on that cross.

No, you don’t arb on BTC/USDT. You arb on XXX/BTC and then convert BTC to USD regularly on GDAX.

Got it. So we agree, the arb has to be on the same cross (XXX/BTC) on different exchanges.

Yup. Bittrex is a good companion

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