What is Arbitrage Fund? expain in deeply

What is Arbitrage Fund?

What is Arbitrage Fund?

 Arbitrage means buying and selling an asset at the same time in different markets, buying it in one market and selling it in the other market. So the price of an asset will be between these two markets and you will be able to earn profit.

 Stock is traded in different markets, such as BSE- Bombay stock market and NSE- National stock exchange. This is both a cash market and also a lion’s share in the stock derivative market. Derivatives markets relate to the future price of a stock.

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 Example- A stop is “A” WhoBSE But it is trading at ₹100 And at the same time the same stock in the derivatives marketTrading at ₹102. So here par price is different, on both these markets For that stock.  So such an opportunity Called Arbitrage Opportunity.

 By whichArbitrage fund manager Takes a name and buys on some stock and that much stock at derivatives square Sells it and takes advantage of this price difference.

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