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1
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3answers
25 views

does an option trading below parity always indicate an arbitrage opportunity

If an option is trading for less than parity, is it always a mispricing, waiting to be arbitraged, or are there other factors that can lead to this?
3
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1answer
42 views

How are ADRs priced?

How is the price of an American Depository Receipt (ADR) determined? An American Depository Receipt is a receipt that a non-U.S. share is held by a bank on behalf of the receipt holder. If you hold ...
-2
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4answers
91 views

How does the value of an asset (valued in two different currencies) change when the exchange rate changes?

Suppose an asset is traded on two different exchanges in different countries having different currencies. In an ideal world without transaction costs, tariffs, taxes or delivery costs etc, the price ...
0
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0answers
44 views

Insurance for Working Capital in Arbitrage Business

I want to make money by arbitraging between financial markets, e.g. buy 1000 units of Foo at $1 on exchange A and sell Foo at $1.50 on exchange B for a profit of $500. Does anyone know of an insurer ...
2
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2answers
817 views

How does spot-futures arbitrage work in the gold market?

According to Kitco, the spot price for gold, at time of writing, is about USD 1240 per ounce. At time of writing, CME Group shows that futures contracts are above that price for many months ahead. ...
2
votes
1answer
104 views

Where can I find the current price to rent ratio of the locality of my interest?

After reading an article about where to buy homes, I'm trying to do research on renting versus purchasing a home. I'd like to figure out what the price to rent ratio is as one factor of my research. ...
3
votes
4answers
318 views

ETF + Hedge ETF = guaranteed profit?

If I own an ETF (say based on the S&P 500) and also a short on a correlated index (e.g. SH), does that mean I am guaranteed to win in either extreme market condition? I simply sell the one that is ...
8
votes
1answer
325 views

Arbitrage with a limit order

The usual notion of arbitrage means that I put two market orders at different exchanges which are immediately executed at different prices, so I earn price difference. Is there a special name for the ...
2
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1answer
125 views

What is the principle of forming an arbitrage strategy?

I have heard that the arbitrage strategy follows the principle of "short in expensive, and long in cheap" (Or, maybe, it was "short in cheap, and long in expensive."). I wonder how to explain this ...