arbitrage from one stock exchange to another

guillaume07 · July 17th, 2007, 9:13 am

Hello,Is it possible to buy a stock in one stock exchange and to sell it in another one ?Thanks

gevor · July 18th, 2007, 6:43 am

You mean - to convert one line to another?I think it is somehow done for some stocks, i.e. Russian MICEX and LSE listings, for a small fee (5 cents?).But sometimes it is not the case, i.e. there are some Russian MICEX and NYSE listings traded with 17% premium one to another due to nun-fungibility.

guillaume07 · July 18th, 2007, 7:05 am

Some stock are quoted on several stock exchange like 'Axa' which is quoted both on NYSE and Euronext Paris.so, i wondered if Is it possible for instance to buy a stock on the NYSE and sell it on Euronext Paris, with the aim of make a profit....And if is it possible, does this manner of doing not disturb the market capitalisation ?

gevor · July 19th, 2007, 6:13 am

Is there big difference?I doubt that it is the fungible asset with large volume - otherwise big banks would have exploited it.What might be interesting for you if you want to trade intraday is to analyze the differences in the behaviour of two stocks, esp. if you believe in some sort of informed vs non-informed traders model.

DavidJN · July 19th, 2007, 12:09 pm

Sure people do this kind of stuff. At least one large Canadian bank has an automated trading application that watches for and executes arb opportunities on stocks listed on both Canadian and US exchanges. How often they find opportunities or how they make doing it, well, only they could say.

BornToBeTrader · July 24th, 2007, 1:49 am

Which Canadian bank does so. I heard RBC is most active with such algorithmic trading...however, its nothing compared to Banks in NYC and london.