How to Arbitrage GLD
Learn how to profit from price differences and help maintain the GLD peg to gold.
GLD stays pegged to gold through arbitrage. When price differences emerge between GLD/PAXG and gold benchmarks, arbitrageurs step in. If spread >1% fee, profit is possible. This mechanism tightens the peg and creates sustainable trading volume.
Monitor Spreads
Watch for deviations in the GLD/PAXG ratio from the theoretical 31.1035 ratio.
Target Ratio:
31.1035:1
Profit Threshold:
>1% Spread
Execute Trades
Buy the undervalued token and sell the overvalued one to capture the spread.
If GLD is cheap: Buy GLD → Sell for PAXG
If PAXG is cheap: Buy PAXG → Sell for GLD
Capture Profit
Profit equals the spread minus the 1% pool fee and gas costs.
Profit = Spread% - 1% - Gas
Arbitrage Calculator
Calculate potential profits from GLD/PAXG arbitrage opportunities.
Quick Spread Calculator
Theoretical peg: 1 GLD = 1 PAXG (≈ 1/31.1 oz gold)
Risk Considerations
Market Risks
- • Price movements during execution
- • Slippage in large trades
- • Competition from other arbitrageurs
Technical Risks
- • Network congestion and gas spikes
- • MEV (Maximal Extractable Value) competition
- • Smart contract interaction failures
Ready to Start Arbitraging?
Monitor the markets, calculate your potential profits, and execute trades when opportunities arise.