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Last updated: 09/01/2024, 9:15AM

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Arbitrage Screener

Watch here, How to use Arbitrage Screener?

What is an Arbitrage Screener?

The arbitrage screener monitors the price difference between Spot and Future on the same exchange or on a different exchange.
Arbitrage involves simultaneously buying and selling an asset in the spot or future to earn a risk-free take advantage of price differences.

CASH & FUTURE Arbitrage

Arbitrage Screener shows Cash & future arbitrage opportunity occurs when a price difference between cash and futures prices within the market.

What is Basis?

The difference between Spot Price and Future Price is known as BASIS. The trader sells the futures contract which is running at PREMIUM and buys the shares of equal quantity in delivery.

Benefits of Using an Arbitrage Screener

Here's how traders can take advantage of this feature:
For instance, let's consider Piramal Enterprises (PEL) listed at the top of the table in the example image. PEL's Spot Price is 882.25, and its Future Price is 889.3, resulting in a basis of 7.08 points. This means traders can potentially earn a minimum profit of 7 points by taking advantage of the price difference.
To utilize this opportunity, a trader can follow these steps:
Sell 1 lot of the Future Contract of PEL at the Future Price of 889.3.
Simultaneously, buy an equal quantity of 550 shares of PEL in the Spot market at the current Spot Price of 882.25.
By doing so, the trader has essentially established a market-neutral position. They will benefit when the basis points difference between the Spot and Future prices narrows. If the basis points decrease, they can capitalize on the difference to earn a profit.
The website's Arbitrage Screener presents all the necessary information, such as the Spot Price, Future Price, basis points, basis percentage, previous day basis points, and change percentage, along with the lot size of the scrip. This allows traders to quickly assess potential arbitrage opportunities and make informed decisions.
By using this tool, traders can access real-time arbitrage differences, enabling them to capitalize on these price divergences and take advantage of this fantastic feature to enhance their trading strategies.

Arbitrage Trading Strategies

Arbitrage Trading Strategies involve the simultaneous buying and selling of assets to exploit price differences. For example, in Cash & Future Arbitrage, a trader might buy an asset in the Spot market and simultaneously sell a Futures contract of the same asset if the Futures are trading at a premium. This allows the to capture the basis, which is the difference between Spot and Future prices.

Benefits of Using an Arbitrage Screener

The benefits of using an Arbitrage Screener are numerous. Traders can access real-time data, spot arbitrage opportunities faster, and optimize their trading decisions. It enhances their ability to capitalize on price inefficiencies and boosts overall profitability.