nil asked in Business & FinanceInvesting · 1 decade ago

who & how can one do arbitrage in indian stock market?

1 Answer

  • Anonymous
    1 decade ago
    Favorite Answer

    The easiest example to explain is this. Company A announces that they are going to buy company B for x amount. The price of company B stock increases but does not quite get to the x price. An arbitrage can be affected by buying company B stock and selling company A stock hoping to make money on the difference between the announced buy price and the current market price of company A stock.

    Another way that you might profit from arbitrage is to open a an investment account with a U S brokerage firm and watch very closely the prices of Indian stocks that are traded on the Bombay stock exchange and in the U S, such as Satyan for example. There often will be a slight price difference between the prices of the two different markets. By buying in the market with the lower price and selling in the market with the higher price you can perhaps take advantage of the price difference. There is one slight problem using that strategy. The two markets are not open at the same time. There is too much of a time difference.

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