HOLLYWOOD STOCK EXCHANGE
THE ENTERTAINMENT MARKET
THE ENTERTAINMENT MARKET
I see your point
I disagree with your statement "and I capture 100% of the possible profit from convergence" as you always have at least one stock that is losing money so you are not making 100% of the possible profit if you you had predicted the opening accurately.
Going back to your original question, this situation probably occurs fairly regularly, but as it's not simple maths it doesn't get raised/noticed. There was a similar situation with one of sets of award options earlier this year where if you had shorted all of them you would have made a guaranteed profit, but not maximised the available profit.
Arbitrage? Aug 01, 19:20
Star Bonds can be arbed. Aug 01, 20:29
I think my example is pure arbitrage -- 100% probability of making a profit doing this trade sequence with derivatives.... Aug 01, 20:46
If i Learned correctly.... Definitely not Pure Arbitrage Aug 03, 17:04
Not my understanding Aug 03, 23:16
yeah its not ARB unless its already made more money than what the stock or bond is trading at {nm} Aug 04, 07:30
I disagree, it IS 100% arbitrage....(Dorfman et al.) Aug 04, 21:25
It's a "Convergence Trade"... i.e., arbitrage Aug 04, 21:36
No, a convergance trade only involves 2 assets Aug 04, 23:04
alfpaul -- convergence involves two POSITIONS, not two ASSETS - nm Aug 09, 20:31
I see your point Aug 04, 23:10