Anyone have experience with bid-ask spread arbitrage?

Discussion in 'ETFs' started by jennywestwong, Feb 21, 2021.

  1. I am curious to know if it is even possible to perform bid-ask spread arbitrage as a retail trader since most brokers do not allow naked shorting. But let say I spot a disparity between IVV and SPY, how can one take advantage of these quick arbitrage opportunity without using option?
     
    kmiklas likes this.
  2. caroy

    caroy

    They are possible but most likely disappear before you could execute as some algo is going to pound it back into parity before you can bring up the order screen. If there is a retail trader who can pull it off my hat's off to them.
     
    kmiklas likes this.
  3. kmiklas

    kmiklas

    What he said. :confused:

    Probably true of any arbitrage like this. In today's electronified markets the algos eyes are humming away in nanosecond speeds at colos looking for exactly these types of imbalances.
     
  4. MrMuppet

    MrMuppet

    If you have a decent autospreader you can make markets in illiquid assets and spread it off against liquid ones.
    I do it all the time
     
    eternaldelight likes this.
  5. i have been noticing a lot of price discrepancy between all the new bitcoin ETFs, hoping that someone is able to give an idea/method of how to capture the arbitrage.
     

  6. When you say price discrepancy between the bitcoin ETFs, what ETFs are you referring to jeenywestwong? I thought the first one just opened up in Canada like just the other day. What tickers are you referring to?

    Thanks!
     
  7. MrMuppet

    MrMuppet

    This is a clearing issue and you probably won't have access to the necessary infrastructure