Crypto exchange premiums: which exchanges run dearer

A coin's price is never quite the same on two exchanges, and on any one coin the gap moves from minute to minute. Across many coins, though, a pattern can show: one exchange that usually prices a little above another, whichever coin you pick. That's a premium. The site's spot scoreboard measures it for every pair of exchanges, live, in its table Exchange against exchange.

What is an exchange premium?

An exchange's premium over another is how much dearer its price is for the same coin at the same moment, usually counted in basis points: 1 bp is 0.01%, so 10 bps on a $10,000 order is $10. A premium on one coin can be noise. A premium on most of the coins two exchanges share belongs to the exchanges themselves, and it's worth knowing which side of it you buy on.

A premium below zero is a discount: that exchange is the cheaper of the two.

Why do some exchanges run dearer?

Traders who buy where a coin is cheap and sell where it's dear keep prices close, as why prices differ explains. A premium that lasts is one they can't easily trade away:

• Money that can't move freely. Where customers can't move money in or out quickly, prices can drift away from everyone else's. The best-known case, the "kimchi premium" on South Korea's exchanges, has at times put Bitcoin well above its price elsewhere.
• Slow or costly withdrawals. If coins take hours to leave an exchange, or cost a lot to move, a gap has to be wide before it's worth closing.
• Different customers. An exchange whose customers mostly buy can sit a little above one whose customers mostly sell, until enough traders work both.
• The quote currency. Many exchanges price in USDC or USDT rather than dollars. The site converts each at Kraken's live rate, so a stablecoin trading a little below a dollar doesn't show up as a premium.

How the scoreboard measures it

For every pair of exchanges, the table takes each market both price right now and works out the difference between their prices at the middle of each book. The median of those differences is the figure: the middle one, so one odd market can't swing it. As it uses the middle of the book, the figure is the same whether you're buying or selling.

• Every exchange is on while the scoreboard is open, whichever you've chosen elsewhere, so every pair can be measured.
• An exchange joins the table once it has a price for at least 10 of the markets, and a figure needs at least 3 markets both price. With too few, the cell shows a dot.
• It's live. The figures move as the books do.

How to read Exchange against exchange

1. Open the spot scoreboard at Exchange against exchange, under the ranking.
2. Find the row of the exchange you'd buy on.
3. Read across to the exchange you're comparing it with. Above zero, the row's exchange is dearer by that many basis points; below zero, cheaper.
4. Hover the figure for its sentence: how much dearer or cheaper, and on how many markets.

Every figure has a mirror, the column's exchange against the row's: the same size, the other sign. A row mostly above zero is an exchange that usually runs dear, and one mostly below usually runs cheap.

Example figures, not market data.

What a premium means for your trade

A premium costs you only where you trade. On a $10,000 buy, 1 bp is $1, so a premium of a basis point or two rarely decides where to trade on its own. A premium of tens of basis points, held across most coins, is worth checking for the coin you want.

Then look at that coin. The median covers every shared market, and the coin you're trading can sit anywhere around it, so its row on the spot index says where it stands now. And a price is what a small order pays: the Trade simulator on each coin's page, Bitcoin's for one, walks each book for your amount and can count each exchange's fee at your own tier.

To see one exchange against all the others, open its own page from the scoreboard: Kraken's, for one. Its card against each exchange shows, for every other exchange, how often its price is the better one on the markets both share, and the median difference.

What the table leaves out

• Fees. It compares prices, not what a trade costs. The scoreboard's After fees ranking counts each exchange's taker fee, and the Trade simulator counts them for your own order.
• Depth. The middle of the book says nothing about how much is for sale near it.
• The past. It's the median now, across the markets priced now. A premium that comes and goes will come and go here too.
• Whether you can use both. Some exchanges don't serve every country. Check what's open to you where you live.

Not financial advice. Prices move while you read them.