Is this an arbitrage opportunity??

T

Tharan-Marc

New Member
#1
#1
Hi Friends,
obviously I'm new here and to futures. So here is my question:
Today I have seen TATA MOTORS for 28.04. expiry, for SELL, lot with 250 shares listed for 1150 - you can find them know. Today's closing was 1102.5, now this is a cool 17.5% interest value.
So let's assume I have seen this today at trading, Sell short for 1150 and let's assume I got 250 share for 1102.50 on Spot, than the deal would be through -
OR not? What could go wrong and do I need to hold the position for how long?
T+2, after I can close the position or not? I guess somewhere I'm wrong, but I don't get it right, can somebody pls help? :confused:
Thanks
Th_M
 
V

Vector

Active Member
#2
#2
Tharan-Marc said:
Hi Friends,
obviously I'm new here and to futures. So here is my question:
Today I have seen TATA MOTORS for 28.04. expiry, for SELL, lot with 250 shares listed for 1150 - you can find them know. Today's closing was 1102.5, now this is a cool 17.5% interest value.
So let's assume I have seen this today at trading, Sell short for 1150 and let's assume I got 250 share for 1102.50 on Spot, than the deal would be through -
OR not? What could go wrong and do I need to hold the position for how long?
T+2, after I can close the position or not? I guess somewhere I'm wrong, but I don't get it right, can somebody pls help? :confused:
Thanks
Th_M
Click to expand...
Either u got to hold till expiry and reverse the trade when cash and futures converge or reverse the trade if u get a favorable opportunity earlier. For eg, of u get to buy back futures @ < sold value and sell cash @ > buy value.

You will have to put up 1103*250 plus about 50000 as margin and some more for MTM . Say about 350000. So your returns would be about 3.5 % max for 2 months( apr expiry) . So 1.5 per month, Right..
 
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