Arbitrage Galore !! Cool Money !!

With markets soaring, people are ignoring ways to make easy money. I happen to find lot of glaring arbitrage opportunities in the market which can be hedged easily with either Options or Futures. :-)) Sounds Interesting !!

I was able to find one sunch glaring arbitrage opportunity in a Reliance group stock - Makes it more interesting!! Right!!

IPCL is going to merge with it a host of companies. Among those, I found these mergers interesting. A few of the listed companies are going to be merged with IPCL. The record date for amalgamation is October 12, 2006. So, these shares will be exchanged for IPCL soon. As on 27, September 2006 these shares were quoting at a discount to the valuation of IPCL.

The IPCL shares were trading at Rs.308 and the companies that are going to be merged like Recron Synthetics (Rs.8.55), India Polyfibres (Rs.10.35) and Central India Polyester was trading at Rs.12.85.

For 34 shares of Recron Synthetics an investor will get 1 share of IPCL. For buying 34 shares one should shell out Rs.290.7 where as the market price of IPCL is Rs.308. Similarly for buying 23 shares of Central India Polyester an investor has to shell out Rs.295.55 and for buying 28 shares of India Polyfibres an investor has to shell out Rs.289.8. In all the above cases an investor has arbitrage. But, the best one sounds to be India Polyfibres. An investor can make atleast 6% if they buy its stock and sell it either in futures or buy a Put option to hedge.

Cool Money folks !!