A few days back, i came across a video showing how one can buy a share on NSE and sell it on BSE to capture arbitrage opportunities. Shares like INFOSYS sometimes show a price discrepancy of ₹1–₹4. However, I personally feel that in most scenarios this may not really work. What are your thoughts on this?
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“Quicky” money is never good. Usually it’s thieves getting your money.
In this case, market depth is a risk. If the difference is say 4: buy at BSE 1000 and sell at NSE 1004, you need to know how many sellers at BSE are offering for 1000 and how many buyers are willing to buy at 1004. The time it takes to place those orders is a another risk. What if market moves adversely after you buy and you can only sell at NSE for 980?
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Look at expenses too, taxes slippages brokerage demat fees.
Also I dont know if Zerodha has started netting these off and considering it as intraday trade. Else you probably need to own the share to be able to sell it.
So check these things, and start with 1 qty to make sure you can execute and then figure out your min difference you need to breakeven. Arbitrage algos probably already look at this, so your profit available may not be much or easily scalable, but verify it yourself.
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I feel the feature is good for selling your holdings in a less liquid stock. Basically select an exchange where the liquidity is high. Its impossible to do arbitrage on an UI, as most hfts compete for the small arbitrage at nanosecond latency at colo.
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