Trading Between Different Markets

Discussion in 'Stock Market Forum' started by micanti, Feb 13, 2018 at 9:33 AM.

  1. micanti

    micanti New Member

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    Hi there,

    i'm still a novice in financial markets, therefore i have the following question.

    I've noticed that the share price of the same company but in different markets can differ. The question seems to be obvious. What would prevent to buy a share in one market and sell it in a market with a higher price ?

    I guess it is a tax issue...but is it an issue for all cases ? what about frankfurt and stuttgart for example.

    Thank you very much for any info !
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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  3. longtermbull

    longtermbull Administrator Staff Member

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    In theory I totally agree but the speed at which computer buy/sell programs are able to spot an arb position and trade it in the blink of an eye makes it almost impossible for the investor on the street to make any money these days. Fine margins but institutions are able to bet big money on these to make decent money. Done correctly they are risk free trades but they dont always work out that way!
     
  4. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Such situations may be more likely to occur when there is an unusual short term move in one of the currencies, or when the two different currencies move in opposite directions.

    There may be a short term selloff of stocks in the region where the currency has suddenly spiked, and more money may flood into the stock markets in the region where the currency has weakened.

    But of course these differences do tend to be relatively small and short lived.
     
  5. longtermbull

    longtermbull Administrator Staff Member

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    True, there may still be opportunities in the future - e.g. less frequently traded ADRs when the underlying stock moves and markets take a while to click on. However, they are becoming fewer and further between.
     

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