Arbitrage

Ok so as I have been learning and researching some investment ideas/strategies I discovered this:

Nortel Networks is listed on both US (NRTLQ) and Canadian exchanges (NT).

NT closing price: $0.10 CAD
NRTLQ closing price: $0.0840 USD
USDCAD ask price: 1.2522

1. Buy 1000 shares of NT for $100.00 CAD
2. Sell 1000 shares of NRTLQ for $84.00 USD
3. Sell $84.00 USD for CAD @ 1.2522 or $105.18 CAD

Realized profit: $105.18 CAD - $100.00 CAD = $5.18 CAD.

Now how would you close this out?

Yes you are long and short Nortel, but will the broker you are selling NRTLQ from accept NT stocks as the cover?


EDIT: Checked my personal bank's website, they are quoting 1.2246 for usd into cad, making 84.00 USD into $102.87 CAD *checked using their fx calculator, convert from x to y*. Realized profit of $2.87 CAD. Will pose question to my broker tomorrow on this subject.

positions

stopped out of both cable and dllryen only to have them run a few hundred pips in my favor.

my fault for putting a small sl on daily tf.

still holding euro long though.

trades

so last night I took 3 trades off daily charts:

Long euro 1.25860 SL 1.24860
Long Cable 1.42732 SL 1.41732
Short Dllryen 93.467 SL 94.467

short's

Flat euro @ 1.26554 +114.6, flat cable 1.42001 +50.1.

Short positions

I am short Cable @ 1.42502, and euro @ 1.27700.

Cable

took -14.

Market is in a short term consolidation, will wait to take signals.

Cable

so try this again.

Short 1.42309.

SL 1.42967.

Cable

Took the position too early. I still have a short Cable bias, and I am slowly becoming USD bullish.

Watching cable to see what happens.

Stopped out -133 pips

Cable

Short cable @ 1.41502

SL 1.42830

Ichimoku based entry.

Ideas

Ok. So I am working on turning my edge into a strategy.

I understand two strategies.

1. There is a market leader, and the rest follow this leader. The leader is always changing. Also, if the others don't follow, take the opposite position. Look for who is stalling, who is moving, and who has recently made a big move. This is known as ticker tape reading. Usually used to scalp, but I think the strategy can be applied fundamentally.

2. Trend is your friend. Ichimoku is a trend indicator that I know inside and out (spent over a year learning this system).

Now I need to combine them together to create a stratagem. Considering using a basket trading style, where I decide fundamentally on a leader, then begin to place positions based on 1st line, 2nd line, etc. Where larger positions are placed on leader, smaller on the lower volatility followers. Risky, Yes.

Currently in the process of unpacking after moving into a new place. Will get back to this later.