BRK.A/B super spread arbs.

K

KINGOFSHORTS

Man you guys notice some interesting arb situations with A/B. Spreads got quite big at some moments. Where A is much lower than B, so a 1 to 30 conversion would become a profitable one.

I have been watching both and there has been some wacky movements and trades going on, Someone is making easy money arbitraging.
 
Quote from KINGOFSHORTS:

Man you guys notice some interesting arb situations with A/B. Spreads got quite big at some moments. Where A is much lower than B, so a 1 to 30 conversion would become a profitable one.

I have been watching both and there has been some wacky movements and trades going on, Someone is making easy money arbitraging.
More...

There is more to it since you can get 30 B shares for 1 A share any time but you cannot get 1 A share for 30 B shares. 1 B share has 1/200th of the voting right of the A share, therefore, the A share trades at a premium.
 
Quote from doublea:

There is more to it since you can get 30 B shares for 1 A share any time but you cannot get 1 A share for 30 B shares. 1 B share has 1/200th of the voting right of the A share, therefore, the A share trades at a premium.
More...

But the arb situation comes to play when BRK.A is actually cheaper than 30B shares combined, when that occurs you make money during the A->B conversion. Obviously you cannot do it the other way around (30 B to 1 A)

I have seen at times some pretty wide spreads,
 
Quote from KINGOFSHORTS:

But the arb situation comes to play when BRK.A is actually cheaper than 30B shares combined, when that occurs you make money during the A->B conversion. Obviously you cannot do it the other way around (30 B to 1 A)

I have seen at times some pretty wide spreads,
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define wide
 
I have been arbing a lot of contractual pairs lately, particularly on opening prints. There has been large movements in many of the spreads, also in the US and ADR spreads.
 
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