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Old 27.06.2011, 12:32
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Currency exchange via securities arbitrage

Hi, I was wondering if anyone has tried exchanging currency via arbitrage of dual-listed securities.

For example, if one were to buy Nestlé stock on the Zürich stock exchange, and later sell it in New York, where it is also listed, one should end up with US dollars, at a minimum currency exchange cost thanks to arbitrage.

I know this is possible with some of the north american brokers, but has anyone tried a similar maneuver in Switzerland?
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Old 27.06.2011, 17:51
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Re: Currency exchange via securities arbitrage

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Hi, I was wondering if anyone has tried exchanging currency via arbitrage of dual-listed securities.

For example, if one were to buy Nestlé stock on the Zürich stock exchange, and later sell it in New York, where it is also listed, one should end up with US dollars, at a minimum currency exchange cost thanks to arbitrage.

I know this is possible with some of the north american brokers, but has anyone tried a similar maneuver in Switzerland?
You won't make a fortune, Goldman Sachs computers are doing this all the time if there is so much as a couple of cent's profit per share. Exchanging currency through a broker & in bulk costs very little.
The transfer out costs may kill you if you use a Swiss instertution
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Old 27.06.2011, 18:13
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Re: Currency exchange via securities arbitrage

It isn't so much about making a fortune as about saving on currency exchange costs.

But of course, if the transfer costs of getting the security journaled onto the other exchange are going to kill you, there isn't much point. I was just wondering if anyone had tried it.
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Old 27.06.2011, 19:07
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Re: Currency exchange via securities arbitrage

& if the share value suffers a sudden drop?
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Old 27.06.2011, 19:40
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Re: Currency exchange via securities arbitrage

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& if the share value suffers a sudden drop?
The same argument can be used if the currency suddenly drops.
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Old 27.06.2011, 20:21
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Re: Currency exchange via securities arbitrage

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& if the share value suffers a sudden drop?
You buy and sell at the same time, if your Goldman Sachs the same millisecond.
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