Matched ETH Arbitrage Spread Shrinks After Fees, Prefunding Adds Risk

The takeaway is execution cost, not opportunity: a quoted spread is a gross figure, and fees turn it into something materially smaller, which matters for anyone sizing arbitrage on headline gaps rather than net outcomes. The prefunding point is the sharper one — moving capital upfront relocates risk to the rebalancing leg instead of eliminating it, so the position remains exposed after the first trade closes. Whether desks keep pricing these spreads off quoted gaps or shift to net-of-cost framing is the open question worth watching.