HOLLYWOOD STOCK EXCHANGE
THE ENTERTAINMENT MARKET
THE ENTERTAINMENT MARKET
except that both have to delist at the same price, right?
take NELMS for example. the CX derivative is IPO'd at 101. the stock is trading at 90. Shorting the IPO and going 10K long on the stock is a perfectly hedged riskless profit of $10/share, or $100K, minus commissions. regardless of what happens to the box office of NELMS, that trade will result in a riskless profit.
It makes sense to me that over time, the CX derivative and stock should diverge about 1-2% because of the commission cost of buying the hedge, but any spread over that is pure, totally riskless profit. so why IPO with that spread in place?
how are CX derivatives priced? Jan 12, 18:50
when you figure that out, let me know Jan 12, 19:13
That was the previous method. Starting today, they IPO at the same price as the equivalent on Cantor Exchange. {nm} Jan 12, 19:25
There isn't any arbitrage between MST and CX Derivatives, because their values are tied to box office, not to each other. {nm} Jan 12, 19:51
except that both have to delist at the same price, right? Jan 12, 19:59
That's a fair point. The decision was made to mimic Cantor Exchange. {nm} Jan 12, 20:05
It wouldn't be possible to be ARB or BRA on Day 1 because there won't have been any box office reported on Day 1 Jan 12, 20:10
You'd have to come up with a different term for that... true, one or the other could be overpriced/underpriced Jan 12, 20:27
except that the MST is both about adjust and delist. also, meant arb only in technical sense of riskless profit. Jan 12, 20:38
this whole conversation is pointless, since Antibody said they are IPOing CX at Cantor Exchange prices, end of story Jan 12, 20:58