Just Dial : The existing buyback offer by Just Dial has forced its stock futures to trade at a 10% discount to the shares, unlocking a reverse arbitrage chance for traders.
In this strategy, traders & investors could sell the shares & at the same time buy the stock futures to pocket the 70 rs spread till the expiry of March series of derivative contracts when the spot & futures meet. Since the investors sells this spread, at convergence when it shrinks to zero, his gain will be 9.28% in a month's time. On Friday last week, the last traded price of the shares were Rs 759.5 while that of the March futures was at Rs 689.
The effect of selling the shares & buying the futures throws up two possibilities — that the shares will fall more spiky than the futures or that the futures would rise more sharply than spot, removing out the difference. Then the futures and spot price coincide.Click for free stock tips
Expert advices given in this blog is very necessary for all the people who invest money in stock market to avoid mistakes. To get news letters contact Epic Research.
ReplyDelete