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RE: Why You Should Not Trade on Exchanges - Buy/Sell Tips by Charlie Shrem
Let me explain. All the simple instant exchanges mostly provide operations via Poloniex or Bittrex. Our service http://Changelly.com also do the same. We have deposits on exchanges and on our proxy wallets to make exchanges fast for users. For each exchange operation we make the hedge deal on Poloniex and take a small fee for this. You can have a look, how it works, and how do we calculate rates here:
https://steemit.com/money/@changelly/how-changelly-suggests-the-best-exchange-rates
OTC dealers don't have to make orders as often or as big, because they hedge.
Actually, that makes me think of something... so, when is the crypto-hedge-fund going to be a thing? They would be very helpful partners for the OTC dealers.
Alt coins crypto market is very volatile. In this case to prevent risks dealers must have hight commissions and rates should be differ up to a few percents from Poloniex exchange provider. I can't say for all the OTC dealers, but on http://Changelly.com we have only 0.5% fee. That's why almost all the deals are hedging, especially for high amounts to exchange.