I would like to ask how it is possible that the company traded on two different exchanges has a totally different stock price.
For example: Avast Plc (AVST.L) on London Exchange and Avast Plc (AVST.PR) on Prague exchange? With today share prices 295 GBp on London and 85.5 CZK on Prague exchange which is around 3 GBp.
Thank you for your time.
GBp is a common notation for pence sterling (1/100 of a Pound). The current CZK to GBP (pound) exchange rate is about 28.65, so 85.5 CZK is about 2.98 GBP (pounds), or about 298 GBp (pence) which is much close to the 295 quote in London. The difference is not unusual for cross-listed stocks, especially in different currencies.
When comparing the price of a share on two different exchanges, you must compare the respective bid and asked price of each security at the same moment in time during the regular hours of trading. Closing prices may not be accurate because the last trade could be at or before the close.
Also, in your two links, there's a 12 minute discrepancy in the time and that may also be a factor contributing to the differential.
A useful test for any discrepancy in price is: Does the price difference create an arbitrage opportunity ?
In this case, the trade would be selling the UK listed security (short), converting the pounds received to CZK, and buying the Prague listed security. If you can do that and make a profit, then there is indeed a price discrepancy.
What you may find however is there are hidden costs or unexpected situations that make such activity unprofitable (e.g. transaction fees, system delays on prices).
While arbitrage opportunities can come up from time to time, they are rare, and usually taken advantage of by larger firms can execute transactions with lower transaction costs on a more automated basis. e.g. executing 100,000 such transactions per day for $0.01 profit each time would be an effective strategy.
As a result, it usually means that an assumption about the discrepancy is incorrect, and there is in fact no discrepancy.
