Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Arbitrage opportunity in Ranbaxy

48 sec read

 
Ranbaxy Spot Price : Rs499.1
Ranbaxy Aug Futures : Rs499.5
Ranbaxy Sep Futures : Rs366
Lot : 800 shares
 
Ranabaxy if providing good Arbitrage opportunity as it is highly discounted in September futures.
Providing a Riskless money making from Ranbaxy. Before that its good to know about the reverse
cash – futures arbitrage. Have a look at it.
 
Reverse Cash – Futures Arbitrage
 
Sometimes, the stock futures trade at a discount to its underlying spot prices. Such opportunities
arise when the demand for a stock is more than its supply. In such cases, if one holds such stock,
one can buy the same in futures market and sell it simultaneously in spot market, earning a risk free
return + temporary funds from the sale proceeds of the stock. The position can be reversed when the
differences converge, or on the expiration day of the futures contract, when the prices in spot market
and futures market are bound to converge.
 
 
Possible Ways of Doing it
 
1) Sell Ranbaxy in Cash at @ Rs499 and Buy SEP Futures  @ Rs 366 which is highly discounted from the spot price( nearly 130 pts)
2) Sell Ranbaxy in Aug Futures @ 499 and Buy SEP Futures @ 366
 
Stay with the Ranbaxy Arbitrage till the Discounts are narrowed with the Spot Price
 
 
 
 

 

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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