Correction: When share price was 520 EUR, VW weight in DAX was 16.67% (VW market cap was 151 billion, but 68 billion value assigned in DAX or 45% of shares out or 131 million shares). and also 1/6 = 16.67% so one-sixth of the VW price movement is the contribution it makes to the DAX. Currently VW +30% and DAX +5.4%. So the DAX is up by about 0.40%, if VW was unchanged
Even at 500 euros, the market cap is a crazy 291 million * 500 = 145.50 billion EUR or about 181 billion USD. So even though shorting at 880 and covering at 500 is a nice trade, I am thinking that I could set the buy to close order at lower than 500, if anything. However I still have to keep in mind the crazy situation with the free float. Maybe a buy stop at 600? I am still thinking about it.
For what it's worth, 500 is: (1) near today's low of today (2) near today's open (3) near yesterday's close (4) a nice round number
sold half at 669.89, rest stop at 650. edit: rest stopped out at 650 edit: omg, that was unlucky now 680
Barrons 22 September http://online.barrons.com/article/SB122187570535959489.html?mod=article-outset-box&page=sp Barrons 8 October http://online.barrons.com/article/SB122341595559212735.html?mod=googlenews_barrons Barrons 20 October http://online.barrons.com/article/SB122428342975746231.html?mod=googlenews_barrons Barrons 27 October http://online.barrons.com/article/SB122488832920168391.html?mod=googlenews_barrons&page=sp
update: People catching on to the arb situation a little bit. Porsche now up 15% to 48 EUR and near high of day which was 48.49 EUR
w w w .marketwatch.com/news/story/porsche-raises-its-stake-vw/story.aspx?guid=%7BAD0405DA-5914-4879-81B3-CB1E2E47EFCD%7D&tool=1&dist=bigcharts&