Research in Motion Risk Arbitrage Idea

Rimm currently has a bid/ask on the TSX of:

17.99/18.05 Canadian dollars

This means you can currently sell 1000 rim shares for $17990.00 +commission.

RIMM is trading in the US at:

17.34/17.35$ US Dollars.

Currently the conversion rate of US to Canadian cash rate using TD is:

1.0223

Meaning you can buy 1000 Rimm Shares for 17736.91 Canadian Dollars +commission.

Not really profitable on small level, but calculate a larger amount, say 1000 shares (still same commission)
Buy 1000 shares in US for 17 350 USD or 17 736.91 CAD, Sell 1000 Shares in Canada for 17 990.00 CAD.  Your unrealised profits are 17 990 - 17 736.91 = $253.09

Risks:
-Holding while waiting for prices to converge
-Currency risk.

School Life.

Been very busy lately. noticing I still need to work on organization. Realistically the work isn't that hard, its finding the time to do all of it, pay bills, and still keep a social life. Was sick last week so I have a bunch to catch up on, plus two major assignments due this week, and another midterm on Friday. Marks have been ok, lately they have been dropping. Time to get my ass back in gear and get'r'done.

A logical Argument on HFT

Regulating HFT will cause Volatile markets. Volatile markets cause people to lose money. Therefore, Regulators want you to lose money. Debate.

Admitted!

Was admitted to Carleton University for Quantitative and Mathematical Economics for September!


Only took 3 years to get in...

Short USA conviction

I added a few more otm SHY options the other day (remind me to rant about the execution given to me by my broker...market was 0.10/0.15, market filled me at 0.15 then dropped to 0.05/0.10)...ANYWHO

I am now convicted that the USA will indeed default on their short term loans. If not default, they will create a QE3 which will roll their short term debt into long term debt, essentially doing the same thing that Greece is doing (except Moody's doesn't threaten to lower US debt for the rollovers). BUT by rolling their debt, people will begin to demand more interest for short term loans because of the risk of default on the ever growing debt crisis that the USA has yet to resolve. This higher interest idea came to me after how poorly the 2y auctions have been doing. People clearly do not want to buy bonds at this low of a rate anymore, if nobody is there to buy, the rate will go down until someone starts buying.

Obama reported he wanted to cut 20billion a year over the next decade...even by rolling your debts into longer term debts, your still paying interest, and that debt is going to grow exponentially.

Realistically, If shy drops 3% I will be a happy person (81.00). Lower than that I would be ecstatic.

US short terms and greek bonds

So noticed that everyone had been buying treasuries and the yield went to 0.37. Thinking that the US debt ceiling (if raised) will greatly increase supply, but not demand, I bought a put on SHY (1-3 year short term us treasury etf) @ 85.00 for 0.93.

If US defaults, I break the bank, if they raise the ceiling, i make a little.


Also been looking at greek bonds...the combined rollover bond is 53.xx, 54.xx now. I want to buy this but cannot through my broker. Cannot even find an etf on it...

Stress

So basically on my last hail Mary for getting into school for September and think I may have to actually sit and think of a fallback plan.

I have been at Carleton for almost as long as an Undergraduate program, yet they still will not let me into full time studies.

Make or break time is here, I am teetering on the pass/fail grade of my German course (pass is 63%), and I have started buckling down for the last 2 weeks in hopes I can somehow get an extra 10% boost.


NEEDLESS to say I am stressed for a bunch of things, but work looks like it is picking up now, so at least money wont be one of my major concerns right now.

Anywho, just a short rant today. Time for bed.

ps. I really need to work on the grammar and structure of these late night rants.