Arbitrage

mangup

mangup

Well-Known Member
#1
#1
Let's say we have two prices spot & futures of any script. From this two prices we can derive difference, Ratio, Spread, etc.

Also we can plot Rel Strength Comparison, Relative Strength performance, Spread indicators in metastock.

1. What is way of interpreting these plots?
2. How arbitrageur are identifying the trading opportunity by keeping hedged positions between spot & futures?
3. If we plot difference of these two prices (premium/discount), whether it will help to identify the trading opportunity seeing a spike in difference?
4. How to play arbitrage strategy in options?

Pl share ur views on this.
 
A

anil_s_trivedi

Well-Known Member
#2
#2
mangup said:
Let's say we have two prices spot & futures of any script. From this two prices we can derive difference, Ratio, Spread, etc.

Also we can plot Rel Strength Comparison, Relative Strength performance, Spread indicators in metastock.

1. What is way of interpreting these plots?
2. How arbitrageur are identifying the trading opportunity by keeping hedged positions between spot & futures?
3. If we plot difference of these two prices (premium/discount), whether it will help to identify the trading opportunity seeing a spike in difference?
4. How to play arbitrage strategy in options?

Pl share ur views on this.
Click to expand...
Dear Mangup,

I really dont have any experience of trading on arbitrage model, But what i have heard is they look for correlation/R model. I may not be right, will need to speak to some traders at broking houses.

With the entry of algos into indian market, already a lot of arbitrage opportunities are loosing in many liquid scrips.
Let the other experts can share the information, mostly traders working on proprietory trading can share this information.
 
debashish neogi

debashish neogi

Active Member
#3
#3
Hi, In algo trading arbitrage is very difficult. Difficult in the sense that in many trades u earn a lot but in one or two trades ur whole day profit will whipe off because of wrong or half traded and half market traded sauda.
 
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