Q&A: Is There An Arbitrage Opportunity From Companies Listed On Multiple Countries' Exchanges?

Q&A: Is There An Arbitrage Opportunity From Companies Listed On Multiple Countries' Exchanges?
Carl Hazeley

over 2 years ago1 min

Question from Finimizer Doug in Florida, USA: “Is it common for a public company to be listed on multiple countries' stock exchanges, and are there arbitrage opportunities as a result?”

Answer from lead analyst Carl: “A company with shares listed in more than one country is unusual but not uncommon, Doug. Luxury carmaker Ferrari, for instance, has shares listed in both the US and Italy. But since dual-listed shares should be worth the same wherever they’re bought, there probably isn’t much of an opportunity to arbitrage them – that is, to profit from differences in each exchange’s price. And if there is, you’d need faster-than-human machines – like those professional arbitrage traders have – to sell shares on the more expensive exchange, buy them on the cheaper one, and bag a profit when the price gap closes.”

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