A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. You might be interested in Bitcoin if you like cryptography, distributed peer-to-peer systems, or economics. A large percentage of Bitcoin enthusiasts are libertarians, though people of all political philosophies are welcome.
LGC/WS: Potential for 50% Returns in ~3 Weeks (arbitrage play)!
Hi everyone! I'm here to tell you about a warrant opportunity that is overlooked by the market. While this is not technically a stock, it is a security trading for pennies, with the potential for high movement—and I think finding such plays is the truer purpose of this subreddit, anyway. Besides, there's no warrants. The Play LGC/WS is a warrant for $LGC, which is a SPAC formed to purchase a company for $300 million. They are looking to purchase CarID, an automobile e-commerce site. Now, none of this really matters to me/you. What matters is that LGC/WS warrants are trading at .66. Per the terms of the deal, they are intended to be worth ~$1 soon after the deal closes, which is Nov 4th. From the key terms of the deal: https://preview.redd.it/7t2iwxy3i9t51.png?width=1148&format=png&auto=webp&s=ad4c7971fda45608e5f93106fdb0fda8ef7b94c6 I think there are two reasons the market has missed this massive gap. First, the actual terms of the warrants specify that this $1 could be achieved in a variety of ways. Basically, you get a certain number of cents, and also a certain % of stock, all of which equate to ~$1. Note that, if trading this, you obviously don't have to HOLD and deal with this—you can just sell LGC/WS to someone else, but before the gap has been arbitraged away. Here are the different stock/cash combinations (read the bottom half): https://preview.redd.it/tq0x2i6gj9t51.png?width=2176&format=png&auto=webp&s=cf5489e8365c758449c9bff7c51311631f54b499 The merger is set to close at ~$10.5 / share. So in the worst case scenario, you'd get 18 cents and .082 shares / warrant, for a value of ~$1.04! The other scenarios are slightly better. In any case, that's a 50% upside from here. Normally merger arbitrage opportunities have significantly smaller gaps, like 4%. The other reason this gap likely hasn't closed is because the warrant agreement is superficially confusing, and I doubt many have really parsed it. For instance, if you just looked on the NASDAQ website, you'd be confused, because their info seems dated: https://preview.redd.it/e5imazpkk9t51.png?width=2086&format=png&auto=webp&s=05ada9c2ee8fe33ef169895e0c66a49503c6e0b8 So with the deal closing at $10.50/share, I expect people don't think these have value... unless they read the fine print of what they actually entitle you to! Risks SPACs and mergers are always risky, hence the arbitrage opportunity! It's always possible that the deal won't close. I would note, however, that I believe this is a no-vote merger, so shenanigans are less likely to occur. The other major risk is that the stock price at close could fall below ~$5.55, which is where it'd have to be to break even at this point. But I personally doubt a SPAC e-commerce transportation related stock would suddenly halve for no reason. However, I of course can guarantee nothing. TL;DR Warrants are confusing and people are too lazy to parse them (or, I'm misunderstanding something; let me know). Currently, it seems like you can purchase a high likelihood of >$1 for 66 cents! Of course, some gap is warranted due to inherent risks—but this gap seems BIG, and so presents an attractive risk/reward opportunity. Edit: since people are asking and dming me, this should be on etrade, TOS, etc. under “lgc/ws”. It’s not on RH; idk about Webull Disclaimer: Do your own DD. You should be able to clearly express risk factors before investing. I’m not a financial advisor, and this is not financial advice. I have a position in lgc/ws, which may change. There is always a possibility of losing some or all of your investment. Etc., etc.
PKT: Arbitrage + Algo Trading Strategies - $1,000 per hour?
You're probably skeptical about the $1k/hour in the post title so let me explain: 2 weeks ago, PadThai launched its Phase 1 distribution through yield-farming. Now, it's launching it's Phase 2 token called PadThaiKing (PTK) which you can stake to participate in arbitrage and algorithmic trading. What exactly is arbitrage and algorithmic trading? If you don't already know, the DeFi markets are extremely inefficient and there are arbitrage opportunities everywhere (ie. Buy a token for cheaper from 1 place and sell it at a higher price on another). This Monday, I personally made ~10 ETH in 3 hours arbitraging EMN by buying directly through the contract, and selling on Uniswap or Balancer. It was a lot of work and cost a fair amount of gas, and was tough to time sometimes. Now imagine if there was a bot that could make these quick arbitrage trades - at the rate of hundreds of trades per hour, and having it run 24/7. Believe it or not, these types of bots exist. For example, check out this guy making $1,000 per hour with an arbitrage bot: https://etherscan.io/address/0xfe56a0dbdad44dd14e4d560632cc842c8a13642b Now, PadThai is launching PadThaiKing which can be staked to partake in these arbitrage and algo-trading opportunities. The strategies will be created by community members, coded into bots, and profits will be shared among holders. Profits will also be used to buy and burn Pad Thai which will fundamentally increase the price of the governance token. The PadThai dev team has already proven they can properly working smart contracts, and more importantly they've proven they will stick around and see a project out in the long-term. Most food farming tokens disappear after a few days, and PadThai has shown continual development progress. To me, this seems like a seriously undervalued project that has been written off as another food farming clone. But if you dig a bit deeper (poke around in the Discord and Telegram), you'll start to see it's much more than that, and could easily be the next moonshot with the right exposure. PadThaiKing Medium announcement: https://medium.com/@padthaifinance/announcing-padthaiking-by-padthai-finance-87c27ab143df Edit: The token launching soon is called PTK, not "PKT" in the title. Sorry, I was a bit over-excited when writing this post and fat fingered.
Hi all, My accidental journey in the Oil industry continues. I was wondering if anyone here knew much abour Arbitrage Trading or Physical Oil Trading? I understand the basics, but curious to know if anyone has experience in this field?
Is it possible to make money doing arbitrage as a retail trader?
Mainly want to know if it’s possible to do arbitrage as a retail trader or if HFT and market makers snatch up all openings instantly. Would it be possible to do it on lower cap stocks that aren’t being hawked by HFT? Is arbitrage realistically profitable after fees and such to a retail trader or is it only worth the effort if you can do thousands of transactions?
hi all I'm working on an arbitrage algo based on the ornstein-uhlenbeck/vasicek process. I modeled the return anomalies of stocks by estimating the speed of mean reversion of the ornstein-uhlenbeck process using the AR(1) model of the residuals of a base OLS model using PCA composed of multiple ETFs of their corresponding sector. If you guys have any experience in this, my question is: - is there any reason why I wouldn't want to ignore the random walk/instant volatility? because i'm estimating based on the residual of a linear return model and my estimation window is quite wide (60 trading days) - is a linear model is best to base the residual from? -would i want to add other fundamental/techincal factors to the OLS? If i do would that create much non-quantifiable bias to the model? current average r2 on equities ~ 65-70% EDIT: I reposted this on /algotrading to get more answers please follow: https://www.reddit.com/algotrading/comments/jkdmhe/arbitrage_stochastic_modelling_question_fo
Interesting Arbitrage Opportunity in Newly Priced Units Trading Below Par Value
While most of the sub is focused on the recent mergers and the EVs and other most talked about SPACS, I have putting my excess cash to work buying units. The other week, I came across an interesting opportunity and blindly purchased 1000 units of PTK which, at the time, was trading at 9.92 (.08 below par value). Total cost of $9,920. PTK is a small SPAC at $115,000 offering one warrant (which is worth 1/2 of one share) focused on American Tech companies, which is certainly not going to be a big seller like SNPR for example. What makes this really interesting and potentially super profitable is how Fidelity (my broker) split the units (something I had noticed in my prior unit purchases). I received 1000 shares and 1000 warrants as I was supposed to, but the cost basis for the shares (total cost of $9,380) is $9.38, which is significantly lower than the stock's all-time low of $9.75. On the other hand my warrants (at a cost of $540) carry a basis of 54 cents and are trading slightly up, although the lowest warrant price was significantly lower at 32 cents. However, since the shares make up 94.55% of the units, the significantly lower basis for the shares gives you a tremendous windfall, even with a higher basis for the warrants. With the stock trading at 9.77, my shares are now up 4.16% for a $390 gain. Even if the warrants were trading at its all-time low at 32 cents, my loss on the warrants are only $110, which gives me a total gain of $280 or 2.9% Now moving forward, even if this SPAC sucks and I have to redeem, my minimum return will be 6.61% plus whatever the warrants are trading at. Granted, this level of return isn't exciting enough for the meme traders, but as a savings account alternative with near zero principal risk, I'll take 7% gains plus potential upside all day long. That's basically what the S&P gets you on a yearly basis.
Merger arbitrage has become a popular investment strategy used both by professional capital allocators and retail investors alike. It constantly provides numerous attractive situations, but in order to find them, you need to know what to look for and how to spot the red flags as well. In essence, and this is crucial, opportunities to profit from merger arbitrage arise from investor's assessment that the market is overestimating/incorrectly pricing the risks of potential failure, and then betting on the successful closure of the merger (or from pure luck - by guessing correctly which mergers will close successfully). Therefore, the first question to be asked upon stumbling across a seemingly attractive merger arbitrage case is - why does this spread exist? There are numerous points one has to check before answering this question. Short summary checklist to use in the research process:
Why does the spread exist? What are the main risks and conditions (shareholder approval, regulatory consent, etc.)?
Is the spread appropriate given the risks or this the market mispricing this opportunity?
What is the downside if the transaction fails? How does the risk/reward look like? Collecting pennies in front of a steamroller might not be the best strategy for generating investment returns.
What kind of offer is this? Non-binding and hostile offers are more uncertain, but in certain cases might offer a larger upside.
What is the type of consideration offered? If this is an all-stock merger - are there enough shortable shares available for hedging? The payment of CVRs usually takes much longer than the closing of the merger itself.
What is the strategic rationale behind the offer for both parties?
Is the buyer credible? Will it be able to finance the transaction?
What is the estimated timeline? What are the chances of it being delayed? International mergers are prone to delays. Large-cap mergers have a higher risk of this as well.
Where there any other bidders? Is there a possibility of a bidding war? In case the current deal fails, how likely is it for another bidder to appear? Is there a go-shop period?
Are there any activist shareholders involved? What are their intentions/agenda?
How likely is the approval from shareholders? Does the offered price seem "fair" for both sides? What other aspects are present that could impact the decision of shareholders? Who are the major shareholders and how are they likely to vote?
Are there any objecting shareholders?
What regulatory approvals are required? What issues could regulators potentially find with the merger (competition, national security)? Regulatory risk is hard to handicap, however, small/micro-cap transactions usually get approvals easier.
What is the termination fee? And does it offer any downside protection?
Position sizing - can one stomach the downside the transaction fails, or add to the position if the spread increases?
In what industry the merger takes place? It might be good to avoid overhyped industries.
What are the chances one still missing something? For larger size transaction spreads almost always exist for a reason.
Is flipping houses and other properties moral or immoral from various philosophers? What makes slavery immoral from most philosophers, but arbitrage and trade of various properties are generally not considered immoral by most philosophers?
Is flipping houses and other properties moral or immoral from various philosophers? What makes slavery immoral from most philosophers, but arbitrage and trade of various properties are generally not considered immoral by most philosophers? What makes banking and other financials generally considered moral? But slavery not? Want both socialistic and capitalistic views Please source opinions to something reliable and reputable from any very educated person in history or in current humanity See https://www.reddit.com/askphilosophy/comments/jf8axz/is_flipping_houses_and_other_properties_moral_o
Retail arbitrage, for those that don’t know is the act of purchasing something at a retailer and then reselling one an online marketplace for a profit. This typically manifests itself as individuals picking thrift stores clean buying an entire rack of coats from Costco. I recently watched a couple buy more than 50 Tommy Hilfiger Childrens winter coats (the entirety of the stock) from the local Costco, with the express intent of selling them and snap at someone who asked if they could have one. All they’re doing is effectively stealing from all of the other shoppers at that store who wanted to buy the coat. It’s not a side hustle. It’s theft with extra steps. You’re creating artificial shortages for your own gain. I understand the efficient markets argument, but it still takes an immoral act.
How does the community feel about liquidation and retail arbitrage?
Been selling on Mercari for quite a while through various accounts, all are “themed” such as one for pets, one for study supplies, one for video games, one for sports, etc. I do a lot of retail arbitrage to keep the supply on my page cheap and unique. I recently had a buyer message me asking where I got my items from, I told her that I buy and resell and it frustrated them a lot. So basically how does the community fee about it? For example (this is not one I’ve done but just an example) Going to the dollar store and purchasing 10 $1 halloween decorations and selling them for essentially $2.50 each.
I’ve read strategies to arbitrage shares versus warrants but does anyone arbitrage the difference between units and shares/warrants? Sometimes the equation of 1 unit = 1 share + 1/X warrant gets out of balance. So by swapping between the two styles of owning the same investment you can lower your cost basis (or get more shares for the same cost basis) It seems like a strategy that one could even automate anytime the balance exceeds some percentage —- Edit: I’m not thinking about splitting units into shares + warrants. Rather selling units and buying shares + warrants if arb is there. And then if the arb swings the other way selling shares + warrants for units. And then do this actively many times
Minn. has been said to be willing to package Johnson and his $16.2 million salary with their #17 Pick in order to create cap room for this off-season, either outright or for modest "filler." Johnson fits our large TPE and is definitely a player who can contribute. But then, of course, there are other teams who will want cap space NEXT off-season, so we could potentially trade Johnson and his expiring salary for a player on a longer-term deal. To get a really desirable player, we might have to package some other assets with Johnson, but after the waiting period is up, we can trade him for a player up to a little over $20 million, so there should be some good options available. It will be a great FA year in 2021, and we can't be in a position to exploit it, so why not look for an indirect benefit by helping out one of the teams that CAN be in a position to compete for a top-shelf FA? I am not really on the Aaron Gordon bandwagon, but Gordon is a player we could land this way, and off-loading his salary (through 2022) for Johnson's expiring one could give Orlando essentially unlimited cap room in 2021. They only have the #15 and #45 Picks this year, and if they keep their powder dry for a year and move Gordon, they could get their payroll commitment for 2021-22 into the $60-70 million range, higher if they re-sign some of their own FAs. Orlando is only one example, though. I can imagine several teams that would like to offload up to $20 million in payroll to compete for the 2021 FA class. For us, I especially like the prospect of drafting Desmond Bane at #17.
Assuming an efficient market, why would trades based on inside information have any more price impact than irrational trades? Wouldn't traders just arbitrage away the price impact of any insider trade in the same way they would any irrational trade?
Arbitrage bezeichnet die Ausnutzung von Preisdifferenzen eines Gutes oder Wertpapiers an verschiedenen Börsen bzw. Märkten. Häufig betrifft das geringfügige Differenzen, die annähernd zeitgleich auftreten. Diese werden durch sogenannte Arbitragegeschäfte häufig in vergleichsweise großem Umfang abgewickelt. Arbitrage is a type of trade in which a security, currency, or commodity is nearly simultaneously bought and sold, in different markets. The purpose of arbitrage is to take advantage of the ... Arbitrage ist eine wichtige Geschäftsstrategie, die nicht nur an den Börsen, sondern auch im Handel rege genutzt wird. Welche Bedeutung der Begriff hat, welche verschiedenen Varianten der Arbitrage es gibt und was die klassischen Beispiele für Arbitragegeschäfte sind, erfährst du in diesem Erklärtext. Arbitrage beschreibt eine risikolose Gewinnmöglichkeit durch den gleichzeitigen Kauf und Verkauf von Wertpapieren. Im Fachjargon nennt man das Free-lunch. Das ist dann möglich, wenn an unterschiedlichen Märkten verschiedene Preise vorherrschen. Beispielsweise könnte es sein, dass eine BMW-Aktie in New York an der Börse günstiger zu haben ist als in Frankfurt. Die Idee der ... Arbitrage involves buying an asset on one market and selling it on another to profit from a price difference between the two. Arbitrage is widely considered to offer an attractive investment opportunity as it tends to provide healthy returns while exposing the investor to minimal risk.
Arbitrage-Handel ist der Kauf oder Verkauf eines Wertpapiers im Handelstag, die die Vorteile von Wer... Skip navigation Sign in. Search. Loading... Close. This video is unavailable. Arbitrage ist möglich, wenn du ein Wertpapier an einem Markt kaufen und gleichzeitig an einem anderen Markt zu einem höheren Preis verkaufen kannst und einen ri... Get Arbitrage Pro & Bonuses Here: https://bonuscrate.com/g/8201/84341/ Thanks for checking out my Arbitrage Pro Review. =====... Arbitrage Basics. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/put-cal... IN THEATERS & ON DEMAND SEPTEMBER 14th! A troubled hedge fund magnate desperate to complete the sale of his trading empire makes an error that forces him to ...