Do arbitrage opportunities exist for retail investors?

Correct. I could buy Dec & June 6 month calendars and sell 12 month Dec. I could buy ice brent sell cme brent. I could go on.

 

No you are wrong. Newwurldm is correct. Pair trading is a subset of stat arb not equal. For example you may have a start arb trade in a nat gas double fly and its clearly not a pair trade.

 

I would say true arbs are not available to retail however stat arb strats are. Retail has higher round trip costs and higher latency so you would need to focus on longer time periods. You would analyse multileg spreads with cointegration studies and go from there. Another hurdle is margining with retail brokers. Say you have a multileg spread a, b, c, d. The retail broker will try and margin you margin a + margin b etc. A prop firm or portfolio margined account will cut your margins right down.

So the answer is yes but with limitations.

 

Here is one. I am on the bid and offer wti on ice 3 tick spread eg. 45.31x 45.34, someone lifts my offer and I hit the 45.32 x 45.33 nymex offer. Its risk free if I am goldman sachs?

 

OMG! Like Debit so eloquently stated, you can't fix stupid comments.

 

Merger arb is open to any account size. And historically it produces excess profits over time as it exploits a market inefficiency.

 

I don't think there is anything risk free ..... There is always a risk.... That might be very low for GS in this case but there are risks like your fixed overhead costs might exceed the amount of times you are able to execute this so call risk free trade... Secondly you could have another desk take huge losses offsetting your gains... The exchange your suppose to leg into might go down temporaryly... All very possible

 

i traded an arb op when i traded for LAC out of St. Thomas-- finding mispricing among the different option exchanges and sometimes the ask was less than the bid which meant free money--- there were also locked markets etc--- it was great when it lasted.

 

You are right. That's been your problem for so long. You can't fix stupid.

 

I traded one for a while too. It still exists (to my knowledge) but is impossible for a retail investor and most institutions as well. It was jurisdiction arbitrage and it required lots of lawyers. It involved trading spreads so it must have been a form of stat arb.