Arbitrage Trading cash-futures

iTrade

Well-Known Member
#1
I want to trade Cash-Futures arbitrage. Anyone has any experience with it? I had few questions.
1. Lets say I plan to buy SBI in cash and sell SBI futures. Buying in cash will attract STT/charges which are quite high. Also futures has some similar less charges. Then the math of risk free profit does not work out due to trading charges. Am I correct here?
2. Do the brokers provide any special leverage for this? If yes, which brokers?
Please guide if some trades cash-futures arbitrage.
I checked previous threads on arbitrage trading and didn't find sufficient answers. So asking here.
 

iTrade

Well-Known Member
#5
Dont even try it ! We cant do it ,, It can be done only by Institutions who use lending of shares instead of purchasing and special broker arrangement for margin + automated advanced trading algo. No way we can beat them !
Thanks for the warning. But atleast on my side, I am not trying intraday here. I will be holding position overnight here. So speed or algo will not matter here. So anyone who can answer the questions here?
 

travi

Well-Known Member
#6
Thanks for the warning. But atleast on my side, I am not trying intraday here. I will be holding position overnight here. So speed or algo will not matter here. So anyone who can answer the questions here?
i think that in theory its apparent but wont take-off practically.
AFAIK its impossible to predict shrinking and expanding of Fut. premium in an overnight position.
The Premium/Discount of Fut. is purely based on demand and supply, hence only the HFT algos make it viable.

On my point of overnight prediction in premium pricing, do share something that i don't know.
 

iTrade

Well-Known Member
#7
I wonder anyone heard of cash-futures arbitrage on delivery basis? price of futures and cash converge near expiry and that's why this is possible. HFT is out of picture here.
 

Similar threads

Broker Special Offers

Intraday Higher Leverage

Save up to 90% in brokerage and get higher leverage for intraday trades.

Name:Phone:
Email:City:
State:
Are you a day trader?