There are some unique opportunities of arbitrage in some stocks. the gap in cash and future of these stocks ranges from Rs 2 to Rs 6. However, i am not sure what i need to do on expiry day. Should i square of my position in future or leave it open and when the demand for shares raised i deliver from my cash segment. regards
Buy the higher priced one and sell the lower priced one. If spot > futures, buy spot and sell futures and do vice versa.
You can let the future contract expire as on expiry Spot price should be equal to Future price
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thanks sir but i am still not clear. Also to my knowledge settlement takes place on spot price and not on future price.