How to Calculate Net Arbitrage Profit With a Scanner

An arbitrage scanner can quickly show a price difference between exchanges, but the displayed spread is not the same as your actual profit.

To calculate net arbitrage profit, you need to start with the scanner's buy and sell prices and then subtract the costs involved in executing the trade. These can include trading fees, slippage, withdrawal or network fees, and other applicable costs.

The basic idea is simple:

Net Arbitrage Profit = Gross Arbitrage Profit − Total Trading Costs

Understanding this calculation helps you determine whether a price difference is potentially useful before acting on it.

What Does a Scanner Actually Show?

Suppose an arbitrage scanner finds:

Exchange A: ETH = $4,000

Exchange B: ETH = $4,040

The apparent price difference is:

$4,040 − $4,000 = $40

That $40 is the gross price difference per ETH.

It is not automatically your profit.

If you buy and sell at those prices, you still have to account for the costs of getting the trade executed.

Step 1: Calculate the Gross Arbitrage Profit

Start with the difference between the selling price and buying price.

Gross Profit = Selling Price − Buying Price

For example:

$4,040 − $4,000 = $40

If you trade 2 ETH:

$40 × 2 = $80

Your gross arbitrage profit is therefore $80 before costs.

Step 2: Calculate the Trading Fees

Both the purchase and sale can involve trading fees.

For example, suppose your exchange charges an illustrative 0.1% fee on each side.

Buying 2 ETH at $4,000 gives:

Trade value = $8,000

A 0.1% fee would be:

$8

Selling 2 ETH at $4,040 gives:

Trade value = $8,080

A 0.1% fee would be:

$8.08

Total trading fees:

$16.08

The actual fee depends on your exchange, account tier, trading volume, and trading pair, so always use your current fee schedule rather than assuming a fixed percentage.

Step 3: Account for Slippage

Slippage occurs when your actual execution price differs from the price displayed by the scanner.

Suppose the scanner shows:

Buy = $4,000

But there isn't enough liquidity at $4,000 to fill your entire order.

Your actual average purchase price could be slightly higher.

The same can happen on the selling side.

For example, instead of buying at an average of $4,000 and selling at $4,040, you might actually execute around:

Average buy = $4,005

Average sell = $4,035

Your effective spread becomes:

$4,035 − $4,005 = $30

Instead of the original $40.

This is why checking liquidity and order-book depth is important when evaluating scanner results.

Step 4: Include Transfer and Network Costs

If your strategy requires moving cryptocurrency between exchanges, you may also have transfer-related costs.

These can include:

1. Exchange withdrawal fees
2. Blockchain network fees
3. Deposit fees where applicable
4. Other transfer-related charges

For example, if your total transfer-related cost is $10, that amount needs to be deducted from your potential profit.

Some arbitrage strategies avoid waiting for transfers by keeping funds on multiple exchanges, but that requires capital to be distributed across those accounts.

Step 5: Calculate the Net Profit

Now bring everything together.

Suppose your trade produces:

Gross profit: $80

Trading fees: $16.08

Slippage: $10

Transfer/network costs: $10

Then:

Net profit = $80 − $16.08 − $10 − $10

Net profit = $43.92

So although the scanner initially showed an $80 gross difference, the estimated net result after these costs is approximately $43.92.

This is why looking only at the scanner's displayed spread can be misleading.

A Simple Net Arbitrage Formula

You can use this basic formula:

Net Profit = (Sell Price − Buy Price) × Quantity − Trading Fees − Slippage − Transfer Costs − Other Costs

For percentage analysis:

Net Margin = Net Profit ÷ Total Capital Used × 100

For example, if your net profit is $43.92 and you used $8,000:

$43.92 ÷ $8,000 × 100 = 0.549%

Your estimated net margin would therefore be approximately 0.55%.

The calculation is only an estimate until the trades are actually executed.

Beginner-Friendly Scanner Workflow

If you're new to arbitrage, use this process whenever your scanner finds a potential opportunity:

1. Find the spread

Let the scanner identify a price difference between exchanges.

2. Check the buy price

Confirm the actual current price at which you could purchase the asset.

3. Check the sell price

Confirm the price at which you could realistically sell.

4. Check liquidity

Make sure enough volume exists to execute your intended trade.

5. Calculate trading fees

Include both the buy-side and sell-side fees.

6. Estimate slippage

Consider how your order size could affect execution prices.

7. Add transfer costs

Include network or withdrawal costs if funds need to move between exchanges.

8. Calculate the net result

Subtract all applicable costs from the gross spread.

9. Recheck the market

Make sure the opportunity still exists before executing.

This workflow helps prevent a common mistake: assuming that every large spread displayed by a scanner represents an equally large profit.

Gross Spread vs Net Profit

These two numbers should always be treated differently.

A scanner may identify the first three. The trader still needs to verify the remaining variables.

Why Net Profit Matters More Than the Displayed Spread

Imagine two scanner opportunities.

Opportunity A

Gross spread: 1.2%

Estimated total costs: 0.9%

Estimated net margin: 0.3%

Opportunity B

Gross spread: 0.7%

Estimated total costs: 0.2%

Estimated net margin: 0.5%

The larger displayed spread does not automatically produce the larger net result.

This is why an arbitrage scanner should be used as a starting point for analysis rather than as a promise of profitability.

You can also learn more about how scanners identify price differences in How Arbitrage Bots Find Price Differences.

Conclusion

Calculating net arbitrage profit is about looking beyond the price difference displayed by a scanner.

Start with the actual buy and sell prices, calculate the gross spread, and then account for trading fees, slippage, transfer costs, and any other expenses that apply to the strategy.

The result is a much more realistic estimate of what an arbitrage trade could produce.

If you want to monitor potential price differences across supported crypto markets, you can explore PokoBit.