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It is what makes the markets work in a orderly manner and allows everyone the
opportunity to make a good living. Without arbitrage you have imbalances
that shouldn't be there. Look at call options before puts, look at the skew
in futures options and little or no skew in stock options, look at the
relationship between the premium in the S&P, the future and the index versus
the action in the baskets of stocks. It happens in the housing market, the
grocery store and almost every line of business. That is the meaning of
business, looking for your edge and exploiting it for the benefit of the
business or the stock holders or the investors. Arbitrage is nothing more
then a better mouse trap and many people who do that will tell of the dangers
and substantial loses incurred when they are wrong. Ira
Edelina wrote:
> dominick, did you ever hear about arbitrage ?
> did you ever hear about honesty ?
> did you hear about technology ?
>
> dont look for honesty in the stock market!
> dont look for honesty in the market.............
> if you know how many peoples are trying to make a living with
> the market ...............you are going to accept any kind of arbitrage !
> once is done from privates .............................
>
> once is executed from big managers its called THIEF..........with
> permission!
>
> best regards.....
>
> ----- Original Message -----
> From: Dominick Mattioni <Dominick@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Sent: Sonntag, 2. Mai 1999 15:49
> Subject: Index Stocks
>
> >An Index stock like S&P 500 Spyder, (SPY),
> >represents a 10 to 1 ratio and therefore should
> >move
> >in direct proportion to the S&P 500 index.
> >
> >1-If no one bought the SPDR would the SPDR still
> >move in unison with the S&P 500?
> >2-If there were heavy trading in the SPDR could
> >the SPDR be out of proportion to
> > its index and therefore be subject to
> >arbitrage?
> >3. Could one be a leading indicator for the other?
> >
> >The above questions, I imagine, would apply to
> >all representatvie index stocks.
> >
> >Dominick
> >
> >
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