Assume you hold Reliance shares in your demat account and notice:
Reliance trades at ₹2604 on BSE Reliance trades at ₹2600 on NSEYour arbitrage strategy:
Sell your Reliance shares on BSE at ₹2604 Buy the same quantity of Reliance shares on NSE at ₹2600 Earn ₹4 profit per share (excluding transaction costs)
Do the stocks move out? If so, it’ll close long term positions and be taxed. If not, it’ll be a intraday speculative business income?
With interoperability enabled, your buy and sell will be treated as intraday, while the stocks will remain in your demat, and the resulting profit or loss will be classified as speculative business income.For T2T category stocks, sell and buy will not be netted off since intraday is not allowed. Any buy order will always be treated as a fresh delivery trade.
If that’s the case, why do I need to already hold the stocks?
Yes, you can carry out arbitrage trades between two exchanges, but only when you already hold the stocks in your demat account.
Why can’t I do a simple intraday for sell 2604 and buy 2600?
We are allowing interoperability so you dont have to hold the stocks in your demat a/c.Thanks for pointing out we will update the support article.
Then, You should also update:
And probably many related articles.
Sure, we’ll have this checked with our team.