Arbitrage: Is It Still Worth it in 2026?

I have been doing arbitrage since 2017/2018. It’s been one of the best - if not the best - investments of my life.

When I started, margins were around 7%, meaning that for every R100,000 we invested, we got roughly R107,000 back after trading the cycle a day later. However, as more people discovered arbitrage, the opportunity naturally became smaller.

• Buying pressure hits the cheaper market → price goes up

• Selling pressure hits the expensive market → price comes down

Fast forward to January 2026, and the average net margin is now around 0.35%.

• We used to make R7,000 per R100,000 arb trade

• Now it’s down to R350 per R100,000.

That’s a massive difference right there. The glory days are well and truly behind us. BUT, before we call it a day, let’s assess how today’s arb returns compare with other investments.

Here’s the video where we break it all down in the MoneyMoves Studio.

Important disclaimer:

Quick Recap: What is Arbitrage

Arbitrage is when the same product trades at different prices in different markets, and investors profit from that difference. Let’s look at an example:

• Packet of NikNaks in SA = R10

• Packet of NikNaks in US = $1 ≈ R15

How do we arbitrage? Buy cheap in SA, sell expensive in the US. Rinse and repeat. Easy as that.

PS: There are a few companies offering arbitrage services, with one clearly standing out in our experience. Feel free to reach out if you'd like to know which one we use. The choice of provider can make a massive difference to your bottom line.

Arbitrage Income Sources

Arbitrage returns come from two sources:

1. Cash in bank: 5% interest on capital per year

2. Arbitrage profit: 0.35% per trade

South Africans are allowed to externalise up to R1 million discretionary allowance (recently adjusted to R2 million) plus R10 million foreign investment allowance per year. This means roughly R11 million (recently adjusted to R12 million) can be cycled through arbitrage trades annually.

PS: We assume R200,000 capital

Running the Numbers - Individual Base Case

Base Case (Feb 2026): Arb 0.35%

• Investment Capital: R200,000

• Savings: 5% x R200,000 = R10,000

• Arb: 0.35% x 11million = R38,500

• ROI: R48,500 on R200,000 investment = ≈ 24% per year

Bear Case: Arb 0.20%

• Investment Capital: R200,000

• Savings: 5% x R200,000 = R10,000

• Arb: 0.2% x 11million = R22,000

• ROI: R32,000 on R200,000 investment = ≈ 16% per year

Bull Case: Arb 0.5%

• Investment Capital: R200,000

• Savings: 5% x R200,000 = R10,000

• Arb: 0.5% x 11million = R55,000

• ROI: R65,000 on R200,000 investment = ≈ 32% per year

The Holy Grail: Marriage

The real magic happens when you’re married. There are two massive advantages:

1. Combine capital: Couples can invest as a household, not individuals, meaning they need R200,000 combined, not each in individual capacity.

2. Double the allowance: Each individual has an R11 million annual offshore allowance. As a household, this becomes R22 million.

This means: Double the trading volume, double the profits, without needing to double the capital (remains R200,000)

Running the Numbers - Married Couple

• Combined Investment Capital: R200,000

• Savings: 5% x R200,000 = R10,000

• Arb (spouse1): 0.35% x 11million = R38,500

• Arb (spouse2): 0.35% x 11million = R38,500

• ROI: R87,000 on R200,000 investment = ≈ 43% per year

Now that’s what I’m talking about.

PS: Given these numbers, I’m adding arbitrage to my personal portfolio for the year. I’m taking the average between the individual and married couple ROI for reporting purposes.

Who Are We?😎

Paul Roux

Ingrid Kluckow

Our Full Offering🎖️

We have extended our value offering to five key pillars:

1. Investments

2. Insurance

3. Arbitrage

Thank you for trusting us with your wealth. If you have any questions, want to review your portfolio, or just want to chat about what’s happening in the markets, feel free to reach out anytime.

Warm regards,
Paul & Ingrid