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| *The Commerce Journal>>>Investing |
Can a stock listed in two exchanges be bought in one and sold on the other and vice versa? |
Lets say a stock is dual listed on Nasdaq in the US and SGX in Singapore. Can shares of the company bought on SGX be sold on Nasdaq? Yes this is possible and it is done quite frequently by arbitrageurs. Arbitrage can take place when a stock is trading in two markets and there is a slight difference in the prices. For example, XYZ is trading in market A at $21 a share and in market B at $21.10 per share. You buy 100,000 shares in market A and at the same time sell short 100,000 shares in market B. Your profit is $10,000. Unfortunately, arbitrage is not available to most investors. You have to have instant real time information on the prices, you have to be able to place orders simultaneously, and commissions would wipe out your profits. More likely, the price difference might be only 2-3 cents and the prices change constantly, so these opportunities are available only to people who specialize in them. Yes. You can. Yes. |
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