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?
Question about intermarket arbitrage
- Thread starter closdubois
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Can he? I think there are books on this subject. Arbritrage? Maybe somebody can recommend a good book or DVD on the subject.
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.
fungible from my understanding just means you could buy a stock on NYSE and sell it on ARCA etc
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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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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