Profit from HONEST asset arbitration and mitigate force settlement

Let's discuss an obvious arb opportunity on HONEST assets.

Markets: BTS/HONEST.BTC, BTS/xxx.BTC (where xxx is a gateway like GDEX or RUDEX)

Let's assume there are is opportunity sometimes, e.g. you can buy BTS with HONEST.BTC and sell it to get xxx.BTC, or vise-versa. To be able to execute arb trades, the bot needs both xxx.BTC and HONEST.BTC balance. The latter could be borrowed, though there is a risk to be force-settled. This could be a problem if we're want to keep our BTS position constant.

So, the bot should constantly monitor it's debt position, and if it was lowered unexpectedly, it should:

Calculate BTS diff = BTS before - BTS now
Buy BTS diff amount using xxx.BTC
Adjust debt position up to restore initial debt amount

So in short, this is an instant hedging algorithm.

Note: force settlement on HONEST assets is at 0% offset, this means settle price is a bit lower than ask price on BTS/xxx.BTC market. This means, you're loosing x% (~1%) re-buying BTS from lowest ask.