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The reason is arbitrage. If two identical (or nearly identical) instruments
are selling at different prices, there most likely is an opportunity to sell
the more expensive and buy the cheaper and thus profit (costs must be
considered.) Such arbitrage keeps the prices of the instruments somewhat
equal.
Regards, Jack.
----- Original Message -----
From: "Ian Waugh" <ianwaugh@xxxxxxxxxxxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Cc: <ianwaugh@xxxxxxxxxxxxxxxxxxx>
Sent: Wednesday, April 24, 2002 11:15 AM
Subject: S&P sync
> This is probably an obvious question for the old hands but I would
> appreciate enlightenment...
>
> The S&P is open outcry and the S&P emini is electronically traded yet
> they usually manage to move together and stay within 0.25 point of each
> other, even in fairly fast-moving markets. How come?
>
> Cheers,
> Ian
>
>
>
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