Risk free trading Strategy

We have some strategies where you only need to find out opportunities,  whenever you get the opportunity apply this ARBITRAGE strategy, where risk will be 0% and you can book the profit on the expiry so let's start learning ARBITRAGEOUR...


* What is arbitrage ?
Arbitrage is occur when a security is purchased in one market and simultaneously sold in another market at a higher price. thus considered to be risk free profit for the trader.

* Who is Arbitrageour ?
people who engaged in arbitrage are called arbitrageour.

* A simple example of arbitrage,

As a simple example of arbitrage consider the following. If the stock of the XYZ company trading at 200rs on NSE cash and future is trading at 210rs then u can buy in cash and sell in future market and difference will be your profit. because on the expiry both price will be converge.

* Is Arbitrage is illegal ?
 There is no question that arbitrage is legal because the Arber is exploring price difference in the market. effectively buying and selling as any trader does. there is nothing illegal about this.

* Advantage and disadvantage of arbitrage.
     -Advantage:-
-Advantage of arbitrage is that it can totally eliminate or highly limit your risk.
-Also, arbitrage helps keep the price of securities more less then same in the market and reduce fluctuation.
-more, arbitrage encourage the market to be more efficient.
    - Disadvantage:-
- Disadvantage of arbitrage is that there may be too many transaction costs in trading securities, this can lead to wrong calculations of profit and may cause losses in the long run.
- many arbitrage opportunities it would require a lot of time capital and technologies.
-It is expansive, you will need lakhs of rupees.

* Condition for arbitrage
Any of three condition met, arbitrage is possible.
1. The same asset does not trade at the same price on all markets.
2. Two assets with identical cash flow  don't trade at the same price.
3. An asset with a known price in the future does not today  trade at its future price discounted at the risk free interest rate.