Arbitrage, buying equity on NSE and selling it on BSE, is it possible?

#21

thanks bro.but i meant to ask what are the stocks that commonly trade on both the exchanges for example reliance which is traded on both NSE AND BSE…

#22

its totally 30 stocks???that traded commonly on both the exchanges.

#23

Just to add one quick small point,
I think you won’t make a profit if the price in both the exchange stays between 1000-1004 (i.e. between buy-sell range), no matter what the difference is.
For example, if say the price is 1002 in both the exchanges, you close the position. Although the difference is less than 1004-1000 i.e. 4, but we make no profit,no loss

#24

I don’t want to do for intraday but I want to CNC and shares will be there in my demat account.Suppose I purchased Reliance shares on Monday, so after T+2 days I will get the deleivery. That means shares will be allocated on Wednesday and I will be able to SELL those on Thursday if I get a good price.
If I SELL at BSE on Thursday then do I need to buy again from BSE and Sell in NSE?

1 Like
#25

if you get a good price in BSE, you can sell it . No need to buy again from BSE and sell it in NSE.

#26

dear can you elaborate in detail about “cash future arbitrage”?

#28

detail info. about cash future arbitrage?
thanks

#29

Thanks, it was a nice explanation regarding arbitrage.
I have also read your blog post on the same topic.

But, there is a huge contrast between your explanation and @nithin (above) about the applicability of arbitrage for intra-day.

He has mentioned that arbitrage can be applied also in intraday but you are telling that it can only be applied in delivery based (

Is there any other source where I can get the confirmation of arbitrage’s applicability in intra-day or if @nithin can come and clear the confusion.

#30

Can you look at my original answer below, which bit do you want me to clarify on?

May '14
You can do such an arbitrage trade for intraday, so you can buy on NSE at 1000 and sell on BSE at 1004, when the price difference comes lower than 4 (1004-1000) 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 1004 on BSE and immediately buy it on NSE for 1000, 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. Assume you buy reliance stock on NSE at Rs 1000, the delivery of this stock will come to you only on Wednesday evening (T+2 day), whereas the stock you sold on BSE at 1004, you will have to give delivery of that to the exchange latest by wednesday morning (T+2). 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.

1 Like
#31

@nithin thanks for your effort to clear the confusion.

I needed clarity on below part.

This states that arbitrage can be done also on intraday. Is this true?

Because @sachin0414 mentioned that arbitrage can not be done on intraday.

#32

hmm… you are definitely allowed to do this intraday. Buy on one exchange and sell on other, do the reverse when the spread comes down before end of day. I don’t think you will find too many such opportunities though.

2 Likes
#33

Thanks for the clarity.

#34

Can Zerodha Streak do this? Or what are other good softwares? Any tips on how to setup this trade Sir?

#35

Whats a SEBI approved algo software?

#36

yes arbitrage is possible. we at babli investment provide many ideas and programmes for unlisted shares.

#37

Suppose I have 500 shares of reliance in my demat and I see the spread between nse and bse of 2 points so if I buy on exchange having lower price and sell on higher price exchange , will I end up being net profitable after all the costs involved. If yes can I do this on daily basis whenever I see the price difference.

#38

Yes, you can sell your shares where the price is higher and buy it back where it is lower. This will be considered as a delivery trade, so the biggest cost will be STT which is 0.1%. Two sides, it will be 0.2%, or Rs 2000. Add DP charges, stamp, etc, it will be another Rs 200 extra. So total cost will be Rs 2200 (with us brokerage will be 0 for this). I am assuming Reliance to be at 1000 for this example.

To recover Rs 2200, you will need atleast 4.5 points for 500 shares. So 2 points won’t be enough.

1 Like
#39

I think STT would be 0.2 percentage of total amount that is 500*1000 which turns out to be Rs 1000. Or am I missing something?

#40

Ah yeah.

Both the trades will be considered delivery. Sell on one exchange and buy on the other exchange. So it is two trades, together totally 10lks. 0.1% of this, or Rs 1000.

1 Like
#41

Explained very beautifully (with live trading) in this video:

-Neha (vrdnation.com)

3 Likes