gaurav (trainee ca final and cfa student) (80 Points)
15 March 2010HELLO MY DEAR FRIENDS ,
I WANT TO KNOW THAT ,CAN WE MAKE ARBITRAGE GAIN FROM BUY STOCK FROM ONE MARKET ,WHICH PROVIDING CHEAPER PRICE OF A STOCK & SELL SAME STOCK IN DIFFERENT MARKET AT HIGH PRICE(AS WE KNOW A PARTICULAR STOCK HAVE DIFFERENT PRICES IN DIFFERENT MARKETS... FOR EXAMPLE: BUY RIL FROM NSE AT RS.617 & SELL AT BSE ON RS.620 ,,, IS IT POSSIBLE ????
SONUJRT
(CA FINAL STUDENT)
(337 Points)
Replied 15 March 2010
HIIIII GAURAV,
BSE SHARES ARE TRADED ONLY IN BSE COUNTER WHERAS NSE ON NSE COUNTER.
THERSFORE NO SUCH TYPE OF GAIN POSSIBLE.
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 15 March 2010
Ur idea really rocks...
But sorry dude, thats impossible.. Rather next to impossible...
gaurav
(trainee ca final and cfa student)
(80 Points)
Replied 15 March 2010
but when company issues shares whether it is IPO or FPO, company get his shares listed in many stock exchanges(NSE & BSE) and normally shareholder get his shares in share certificate form or in d-mat form, so in which exchange shareholder can sell his shares(BSE OR NSE,) ????
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 15 March 2010
Gaurav, IPO is when a company issues its shares for very first time, that is INITIAL PUBLIC OFFER... and when it issues any shares in future, those are FPO....
Now, the shares of companies are listed in both the exchanges (as per company's own demand).
gaurav
(trainee ca final and cfa student)
(80 Points)
Replied 15 March 2010
DEAR DHHERAJ, AS U R SAYING ,SHARES OF COMPANIES ARE LISTED BOTH EXCHNAGES, BUT A SINGLE WHICH COMMON TRADED IN BOTH EXCHANGES, AND HOW A COMMON SHARE HAVE MANY PRICES ,WHEN SHARES ARE SAME AND ON FPO OR IPO AFTER ALLOTMENT OF SHARES ,CAN I SHAREHOLDER THESE SHARES IN BOTH MARKET...
Tharun Raj
(CMA)
(1016 Points)
Replied 16 March 2010
@ Gaurav
It is possible, what you have said is absolutely happening, But there are quite a lot of issues
1. Many brokers wont permit it.
2. You have to enter into two positions ( Long and Short ) at the same time.
3. If some brokers permit, then you have to take care of brokerage, At the time of buying and at the time of selling.
4.Usually the prices in the market are so quoted considering differences in brokerage, and if r are able to locate then you have to trade in lots ( like 1000 to 10000 shares)
Sahil
(CA FINAL)
(182 Points)
Replied 16 March 2010
Yes u can make it via future n options
contact me at
sahiltrade @ yahoo.com
CA Ayush Agarwal
(Kolkata-Pune-Mumbai)
(27186 Points)
Replied 16 March 2010
gaurav
(trainee ca final and cfa student)
(80 Points)
Replied 16 March 2010
DEAR FRIENDS ,
CAN U TELL ME, DUE TO WHAT REASON THERE IS DIFFERENCE IN SHARE IN PRICES OF A PARTICULAR STOCK(WHY A SHARES HAVE MUTIPLE VALUES), AND U WANT TO SAY THAT A SHAREHOLDER CAN BUY SHARES FROM NSE & SELL THESE SHARES IN BSE EXCEPT INTRADAY, MAY ANYONE TELL ME MORE RELATED TO THIS CONCEPT
Jayesh Morbia
(Cheif Accountant)
(84 Points)
Replied 16 April 2010
Hi ! Gaurav
It is Possible and it is happening in India like
1) Cash to Cash Arbitration
2) Cash to Future Arbitration
3) cash-future-option arbitration
Many brokers use their card for this type of activities. But you need to consider following issues
1) you shud possess delivery for stock and equivalent cash to purchase.
2) brokerage & demat charges
3) you can do it in intraday also
regds
Bijoy N.Momaya
(www.RupeeResearch.com (Eqty Advisory & Stock Broker))
(477 Points)
Replied 18 April 2010
@ Gaurav: The rate difference occurs due to its listing in different markets. Its very simple. Suppose u wanna buy a fruit... U may notice that there are rate difference in two different markets for the same fruit. Same way goes here.
And i would like to make it clear that u can do Arbit Trade or Arbitrization.. U can buy any stock listed in either of the exchanges and sell it in the other exchange. But most of the times the rate difference is about 1 or 2.rs which goes in way of brokerage. So it is not profitable. Usually only brokers do this trade as they do not have to consider brokerage aspect for their own trading. But yh, if u are able to trade with big difference in rates thn u may do it. There is no restriction.
U can even trade on intraday basis.
Thnx n Regds
Bijoy Momaya. :)
CAclubindia
