Near Arbitrage Trading Idea

[VOLTRON]

Festive Season Giveaway !!!

For those of you that trade beyond the forex market market , here is one trading idea


Buy TOM (Tommy Hilfiger corp) as of writing this , it is trading round about $15. 92 Bid

It is a high frequency trade so buy it anyday you like from this price upto near $16.80


You may get days that is may fall a bit , so my strategy is on a falling day , wait until it's dropped 10 points and buy again .


WARNING: Do not buy above $16.70-$16.75



IDEA NUMBER 2 :

This one is an old one, and my personal favorite for about 2 months now ,

Buy SEBL (Sibel systems Inc) , trading round about $10.59 Bid

It should trade to $10.64-65 Before this trade expires , small profit i hear you say , but its SURE profit ..........



THE IDEAS ABOVE IS FOR INFORMATION ONLY .

Merry xmas everyone and happy trading .......


Vivid Imagination Communication.

 

[peto]

Where is the 'arbitrage' in these trades? They look like one-way bets to me, however inspired.
p

 

[VOLTRON]

Arbitrage do not have to have two sides to it peto , but if you can only see arbitrage the way the "textbooks" describe it , i can expand on the trades mentioned, the other sides of the trades is not tradeable nor relevant to the strategy ........in the case of the SEBL trade, the other side would have been ORCL , but it is immaterial at this stage of the trade ............as for the TOM trade, its gonna take too long to explain but it is also technically immaterial to the trade ............ its your call , u can either deal or not deal . But i invite you to watch the price movement over the next 4- 6 weeks if you've got the time

 

[zuke]

Arbitrage do not have to have two sides to it peto , but if you can only see arbitrage the way the "textbooks" describe it , i can expand on the trades mentioned, the other sides of the trades is not tradeable nor relevant to the strategy ........in the case of the SEBL trade, the other side would have been ORCL , but it is immaterial at this stage of the trade ............as for the TOM trade, its gonna take too long to explain but it is also technically immaterial to the trade ............ its your call , u can either deal or not deal . But i invite you to watch the price movement over the next 4- 6 weeks if you've got the time

Cant see the arb myself and "if I were a cynic", I would say that this sounds like a pump and dump.

 

[jimbo57]

Arbitrage do not have to have two sides to it peto , but if you can only see arbitrage the way the "textbooks" describe it , i can expand on the trades mentioned, the other sides of the trades is not tradeable nor relevant to the strategy ........in the case of the SEBL trade, the other side would have been ORCL , but it is immaterial at this stage of the trade ............as for the TOM trade, its gonna take too long to explain but it is also technically immaterial to the trade ............ its your call , u can either deal or not deal . But i invite you to watch the price movement over the next 4- 6 weeks if you've got the time

You are talking rubbish. By definition arbitrage has AT LEAST two sides to it, and often more, to basically arb a risk free market between a number of related markets.

You are, as the previous poster said, just pumping and dumping I suspect, so I would not expect you to understand arbitrage.
PS I am a cynic

 

[theknifemac]

The ORCL/SEBL trade only works if the deal goes through...then the SEBL price should reach 10.66 the offer price from ORCL. The EU have approved the deal, but it is not over until the fat lady sings. Selling the target and buying the acquirer is the typical risk arb play, but it can go horribly wrong if the deal does not go through. There is no guarantee that the price will reach 10.66 and to suggest otherwise is a bit silly.

Stew

 

[VOLTRON]

The ORCL/SEBL trade only works if the deal goes through...then the SEBL price should reach 10.66 the offer price from ORCL. The EU have approved the deal, but it is not over until the fat lady sings. Selling the target and buying the acquirer is the typical risk arb play, but it can go horribly wrong if the deal does not go through. There is no guarantee that the price will reach 10.66 and to suggest otherwise is a bit silly.

Stew

I am happy stew that you have some understanding of the strategy ........the deal is almost certain to go through .........but like i stated in the headline it's a "near arbitrage trade" because what is left is formalities on the deal ........if you read further about the deal you ought to have known this.

Another point i would like to make is "arbitrage " exist if a financial instrument deviates from its true valuation and in most case finding "true " valuation is done by comparing it to a related instrument such as the SP 500 and its components .......etc arbitrage does exist all the time within Mergers and Acquisitons that have been agreed by shareholders and passed through regulations ..........without sounding rude to previous response to this mail i just wanna point out that if people really think arbitrage only exists as a "pair trade " or "spread trade" i'm afraid this is still a long long way for people to learn to trade .

 

[peto]

Voltron you may be referring to 'Statistical Arbitrage' where an advantage lies with lies with one side of a contract, for example in a casino the house can expect to win in the long run. Market making and some forms of program trading arguably fall into this category.

Otherwise the term arbitrage is nearly always used to describe the simultaneous purchase and sale of 2 assets. In mergers and acquisitions, news flow and market sentiment may create imbalances in the two companies. The value of the sum of 2 separate companies may not be the same as the market value of the new merged company. At any one moment the market is struggling to find a balance between the value of the separate entities and the value of the combined entity. Opinion as to the likelihood of a successful deal being struck, and the timescale for this, will sometimes swing prices suddenly creating potential arbitrage opportunities, but only if both stocks are purchased/sold. If you deal in only one you are a speculator, not an arbitrageur. Your long term success over many deals will determined by whether you judge the probabilities and values significantly better than the the average punter. With so many individuals involved in these deals the risk of insider dealing is increased, further stacking the odds against you. If you are consistantly successfull at this game then great, and thanks for sharing your tips, but call it 'intelligent speculation', 'trading increased noise' or 'high probability trades' or something, it's not "near arbitrage"

pete.

ps Why are we in the Forex forum?
Thread moved by Rossored: Not any more

 

[josephforex]

ps...........forex, try again