Crompton Greaves (Arbitrage?)

[Uppai Mappla]

Today (5/3/2010) towards the end of trading hours, I found that Crompton Greaves futures were trading at at Rs. 10 discount vis a vis cash (Rs 435 vs 445). There was no time to think so I quickly bought one lot of futures, which I got at Rs. 436.

Monday (8/3) is the ex date for bonus (3:4) and dividend of Rs. 1.40. Since futures lot will increase proportionately to bonus on Monday, the difference in price should not have been more than, say, Rs. 2.

I have the following doubts:
(1) Did I make any mistake by buying the futures CG instead of the same stocks in cash?
(2) Is there any hidden disadvantage for buying futures just before the record date of a bonus?

I look forward to advice from experts.

 

[karin_jack]

on question 2 i can say u would not get div.... future normaly discount div if any in most of cases.....

 

[rajeshn2007]

Today's CG close is 443.
1.Yesterday the stock has gone ex-dividend.
2.At cmp, monday's ex-bonus rate works out to 253.

Also, your lot size would be adjusted to 1750 shares.
If the futures quotes more than 250, then you are ok.
Anyway , check your calculations again.

 

[shavya]

correction

Hi in my view as vix is below 20 markets across globe should fall badly.