Question about intermarket arbitrage

Discussion in 'Strategy Development' started by closdubois, Feb 1, 2007.

  1. If a company is listed on both the TSX and OTCBB, can I buy a share on one and sell on the other? Or does this only work with big exchanges?
     
  2. Can he? I think there are books on this subject. Arbritrage? Maybe somebody can recommend a good book or DVD on the subject.
     
  3. yes you can.
     
  4. i tried doing this using fungible US stocks through IB. kinda made money on the paper account. lost money on the live account. oh well.
     
  5. TraDaToR

    TraDaToR

    What do you call "fungible" stocks?
     
  6. fungible from my understanding just means you could buy a stock on NYSE and sell it on ARCA etc
     
  7. TraDaToR

    TraDaToR

    OK thanks. English is not my mother tongue.
     
  8. Fungible means the asset is transferable across markets. For example, gold is fungible across multiple markets, you can buy it in London, sell it in N.Y. . Fungibility is a neccessity for a true market arbitrage trade.
    Intermarket arbitrage is difficult. You have several variables to contend with, currency rates, liquidity, clearing, etc. You need to have the proper clearing arrangement and and scale to make it viable. The simple answer, if it was simple , and viable on multiple scales the opportunity would not exist because the opportunity for low risk out-sized gains immediately attracts players who arb it out.

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