Not in the theoretical sense, I mean in the grubby actually buying and selling stuff sense?
Australian stock up 30% today. Which is also US OTC quoted. The US price hasn’t moved as yet. So, what’s the ability to buy now, before it does, to take advantage of that it has?
Yes, I know, arbitrage, depends upon liqudity, and if there’s free money then it’s already been done. But, on the other hand, someone does have to do it for there to be no free money.
What I’m looking for – or who I’m asking the question of – is someone who really grasps the day to day of this. So BiS and I, who were blue buttons decades back isn’t quite the point.
Things like, what time does the OTC market open? Do these foreign stocks properly track the main quotes? Sure, getting 20% (to allow for a large spread) on a couple of thousand shares at 50 cents isn’t a grand bonanza. But the question becomes, does arbitrage at this very low and small level actually work? Is it physically possible to do it?
This is about EML Payments.
Important not to overlook the simultaneity aspect of arbitraged transactions.
So BiS and I, who were blue buttons decades back isn’t quite the point.
Then you’ll remember the obligation, if you found a backwardation, to inform the other side before you dealt. Or risk sentence of invisibility. Weren’t we gentlemen, back when?
Surely, isn’t the problem quotes is only quotes? To establish a position, you’ve got to actually find a seller at the price.
Seems an ideal question to put to Murphy on his blog, under a suitable pseudonym of an insider dealer or manipulator- eg Ivan Boesky, Marsha Stewart, Nick Leeson.
The only arbitrage trading I was involved with was High Frequency Trading between Asia Pacific and US markets. With HFT shaving microseconds off the system response time mattered because then you get the free money and not someone else. If there is free money to be made on market opening you can expect the firms that have invested most in the technology to be first in the queue.
You’d think that, wouldn’t you AndyF? But the marks have to come from somewhere, don’t they? So the systems can’t be any better than second in the queue.
Probably 20 years out of date but;
There seems to be sod all volume on the Pink Sheets when compared to the ASX, so I’d have to wonder why that listing came about.
That bit of the OTC market is still broker/dealer, I think, not necessarily automated order book stuff.
I’m not overly impressed by the daily volume on the ASX either, generally seems to be running under 1% of the shares, so I’d also wonder who the holders are, and what’s driving those large spikes in volume, and who is reacting to news/price.
I don’t think you’d get filled at a reasonable price when attempting to deal on the US OTC market. Particularly not that segment.
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