# Index arbitrage trading strategy

Popular strategies include taking advantage of price differentials between stock index futures, such as those on the Nikkei futures on the Osaka Securities Exchange OSEand the underlying basket of stocks on the Tokyo Stock Exchange. This finance -related article is a stub. See also [ edit ] Algorithmic trading Complex event processing Dark pools of liquidity Index arbitrage trading strategy trading Implementation shortfall Investment strategy Quantitative trading Quote stuffing This finance -related article is a stub. The Osaka Securities Exchange will move its futures and options trading engine to Tokyo inenabling firm to get index arbitrage trading strategy latencies when trading derivatives.

The challenge being of course to correctly identify these, and to have the technology to act in the marketplace before the price correction index arbitrage trading strategy place. Finance stubs Arbitrage Financial markets Mathematical finance. Finance stubs Arbitrage Financial markets Mathematical finance. In practice, however, arbitrage opportunities will always exist given that exchanges operate differently and trading practices differ across markets. This page was last edited on 6 Juneat

In practice, however, arbitrage opportunities will always exist given that exchanges operate differently and trading practices differ across markets. Retrieved from " https: By using this site, you agree to index arbitrage trading strategy Terms of Use and Privacy Policy. Rising index arbitrage activity in Asia will add liquidity to the region's equity markets and create a healthy environment for the cross-listing of indexes between bourses, market participants say.

For example, some companies announce dividends index arbitrage trading strategy, and some half yearly and what the dividend is going to be is not guaranteed. For instance, there are leaders components that react first to market impact and laggers the opposite. This page was last edited on 6 Juneat By using this site, you agree to the Terms of Use and Privacy Policy.

Rising index arbitrage activity in Asia will add liquidity to the region's equity index arbitrage trading strategy and create a healthy environment for the cross-listing of indexes between bourses, market participants say. In theory, the more liquid and efficient markets are, the fewer arbitrage opportunities they present. This finance -related article is a stub. Traders buying into stocks in advance of their joining an index and increasing weight will profit from the rise in demand for the stock when the change takes place.

The arbitrage opportunity is thus a zero-sum transfer of wealth from passive index investors to arbitrageurs. They bring liquidity and depth to the market. From Wikipedia, the free encyclopedia. See also [ edit ] Algorithmic trading Complex event processing Index arbitrage trading strategy pools of liquidity Electronic trading Implementation shortfall Investment strategy Quantitative trading Quote stuffing This finance -related article is a stub. Other types of index arbitrage include basis tradingthe arbitrage between a current index value synthetically replicated and that of its future.