Intraday trades executed 12/9/13

Trade Journal 12-Sept-13,

Trade Capital	40000
NET Profit	3128
Net Return(%)	7.80%
Scrip Name	Entry Price	Exit Pice	Position	P/L	Comments
RANBAXY	470.7	467.15	Short	1775	Reached Target
TCS	1952.4	1959.6	Long	1800	Reached Target
INFY	2066.4	2058.9	Long	-937	SL Triggered
NIFTY5800PE	88.2	98	Long	490	SL Triggered

Brokerage statement for the trades executed today,

Reverse Arbitrage target achieved with Hero motors

After seeing the Reverse Arbitrage opportunity in Hero motors last Thursday I have wrote a detail blog about it on 29-Aug-13. I had mentioned how to execute this arbitrage opportunity seen in the stock and an checklist before executing this trade.

Based on my analysis now 4-Sept-13 I see the Spot:1926.65 & Future:1918.25 price difference of Hero motors is covered 80 points which is almost 90% in just 4 trading days. The difference in price of Spot & Futures is 86 points last week. 

One could have made an risk-free profit of Rs:10000/lot in this trade excluding borrowing and brokerage cost.

The trade idea/strategy mentioned last week. 

Scrip Name	Buy 1 lot Sept Fut @	Sell 125 shares from demat @	Difference  (in BPS)	Gross Profit  (in Rs)	Holding Period
HEROMOTO	1886.75	1972.8	436	10752.05	Till Expiry

I am happy that my idea worked out well in reverse arbitrage strategy, this is the first time I have tried out arbitrage trade and it took off well as expected.

I request those who are reading this blog to share your comments and trade ideas, I believe we could learn more when we share our ideas.

Happy Trading

Reverse Arbitrage: Follow Up

Few things we need to perceive before executing reverse arbitrage trade,

Let's say you're gonna execute reverse arbitrage in heromotoco, 

Stock	No. of lots & Quantity	Block in capital with lender (125%)	Capital to buy 4 lots of heromoto	Total Capital	Excepted profit	Interest Rate for lending
HeroMoto	4*125= 600	(1972*600) + 25% =15 lacs	30K * 4 = 1.2lac	17.2 lacs	Spot/Future difference: 86 * 600 = 51600(3%)	depends upon the broker

So 3% gain of capital in one month period is a good money, but the really catch is borrowing cost of stock and stock going ex-dividend might erode your profit 

Things to watch out:

1. What is the borrowing cost of lending the stock(SLB) ?
2. Is the stock going ex-dividend ?

Happy Trading !