11/30 Presume you had $90,000 to play with: It seems that you could make
0.1-0.2% profit per day just exchanging shares of BRK.A and BRK.B.
Since BRK.A shares are convertible to BRK.B shares, they always trade
at about a 30.3:1 ratio. But since BRK.A has less liquidity that ratio
swings a couple tenths of a % in the course of a day. Is this an
unexploited arbitrage opportunity or am I missing something?
\_ The BH website has a page on this topic.
\_ It discusses A->B conversion when B goes above A/30, and the fact
that the market does not let B goo too far below A/30, but it
does not discuss day trading off the swings in B's range.
conventional day trading has the risk that your stock might
drift in the wrong direction, but with this there is a built-in
limiter to how far they can drift apart.
\_ People with a lot more money than you are already taking
all the profit available in these kinds of arbitrage schemes.
-tom |
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