Can i buy stock in nse and sell in bse
Reliance stock is trading on NSE at and on BSE at , can I buy on NSE and sell on BSE to make a riskless arbitrage profit of Rs 4 per share? You can do such an arbitrage trade for intraday, so you can buy on NSE at and sell on BSE at , when the price difference comes lower than 4 sell on NSE and buy back the shares on BSE.
When you cover, if the difference between NSE and BSE prices is lesser than 4 you make profit if not losses. This is an arbitrage trade, because it doesn't matter to you if reliance goes up or down, all you are bothered is about the price difference between Reliance on NSE and BSE.
You can also do such a trade if you already have stocks in your demat. So for example, if you held Reliance in your demat, you could sell it at on BSE and immediately buy it on NSE for , this way reducing the cost of your holding. What you cannot do is - delivery based, buying on NSE and Selling on BSE without holding the stock in your demat account.
But until wednesday evening you will not have reliance shares, so on wednesday morning you will end up with short delivery and will be taken to auction which can have huge implications in terms of penalty, where you can lose much more than the Rs 4 arbitrage profit you were trying to put the trade for.
I have heard that even brokerages staff people who do this type of activity continuously in a day to make profits in this arbitrage strategy. Although I am not sure, if it is a rumour or truth. I have few doubts, Is it better to do in cash equity or equity futures? Incase of cover order we can only select the open position and press exit in that case it will square off in same exchange only?
Yes arbitrage is very much possible. There are many automated soft wares which are programmed to find out differences in a stock price in two different exchanges, expiry etc.
There are many funds also available. You are not allowed to buy and sell the same stock in different exchanges on the same day. This means if you buy stock XYZ today in NSE, then you are not allowed to sell stock XYZ in BSE the same day. If you do that, you may have penalty of short selling in the exchange you sold.
It means you can only do arbitrage for stocks that you have in your DP. If you have stock XYZ in your DP, you can sell the same in BSE and buy them in NSE as well to bag a profit but then you are not doing intraday trading and so you may be paying the brokerage of delivery to your broker though you are trading on the same day — time wise.
If you are seeing a price difference of few Rupees in both the exchanges does not always means there is an arbitrage. Take an example of Weizzmann Forex. We see the price in BSE as Let me explain to you why.
SRF Stock Price, Share Price, Live BSE/NSE, SRF Bids Offers. Buy/Sell SRF news & tips, & F&O Quotes
The big price number that you see is last traded price which means those price in both the exchange is the traded price and not the price at which you will be able to trade.
Your price would be either offer price or bid price. Let me explain offer price, bid price and last traded price first in simple terms. So if you execute the trade then your offer price should be So arbitrage exists only if you have higher bid price and lower offer price in either of the exchanges. As a retail investor we may be able to spot some arbitrage opportunities but if you try to key in those trades manually, the opportunity may be gone because there are so many big traders who have automated softwares running for spotting such arbitrages and execute those trades.
If you think you can beat those programs spotting arbitrages, you are wrong. It does not mean that retail investor cannot trade in arbitrage and circuits are best opportunities for arbitrage where if you have stock in your DP and if it hits circuit in both the exchange, you can opt to buy in circuit where the pricing is low and once the buy is executed, you can sell your stock from DP in exchange where pricing is higher than you just purchased.
Avoid spotting arbitrage in low volume stocks because pair trade execution can be tough in them. If you have any question about arbitrage, you can ask them in comments below. But how many times i can repeat my trades? Price on NSE is and BSE is Yes, VTN you are right, for arbitrage in intraday you need to do 4 trades.
Buy in nse and sell in bse - 1st set you do this, when gap is large Sell in nse and buy in bse - 2nd set These 2 are square off trades - you do this on same day when gap is narrow or no gap The difference in gap between 1st set and 2nd set is your profit.
Cover orders are market orders and so you dont have better control. Arbitrage seems to be more complex than I thought.
Buying in BSE and Selling in NSE
So I was under the assumption that in arbitrage one makes a profit out of the price difference for the same thing in two different markets. Now common sense would say, I buy at higher price of two exchanges and sell at the lower one, or vice versa.
CAn anyone tell me the logic behind doing four trades? I have tried to explain here ariaz http: Powered by Discourse , best viewed with JavaScript enabled. Arbitrage, buying equity on NSE and selling it on BSE, is it possible?
Yes it is possible to do on intraday basis.
Many people follow this as a separate strategy itself. Yes, but don't do this manually. Arbitrage is not An Intraday Trade Cost Wise You are not allowed to buy and sell the same stock in different exchanges on the same day. Last Traded Price is not the Price for Arbitrage If you are seeing a price difference of few Rupees in both the exchanges does not always means there is an arbitrage.
Offer price is the price that others are offering their shares at. So you can buy at the offer price. Bid price is the price that others are willing to buy shares at. So you can sell at the bid price.
Last traded price is the price when offer price and bid price matched and the trade took place. So if you see the offer price and bid price in both the exchanges they are Offer price in NSE is Bid price in BSE is Arbitrage Trades should never be Manual As a retail investor we may be able to spot some arbitrage opportunities but if you try to key in those trades manually, the opportunity may be gone because there are so many big traders who have automated softwares running for spotting such arbitrages and execute those trades.
Final Thoughts Avoid spotting arbitrage in low volume stocks because pair trade execution can be tough in them. Yes u can do if u buy in volumes only u can earn. Around stocks in NSE and stocks in BSE.