Arbitrage on bundles

Ok so I bought $100 worth of a bundle that was priced by the market at 1.05 (I added up the prices) so as the video tutorial suggested I expected to get a $5 return when I sold it. But I ended up $25 down even though I sold the bundle straight away after buying it (well ok it took 4 minutes to click through all the stocks) What happened? First I thought it was trading fees but I see the max is $5 per month so that's not it. I saw in another forum that there is a bot around that kills arbitrage opportunities (seems a bit unfair to me...) Or is there some other simple explanation?

p.s. having a "sell bundle" option would be really useful to catch the arbitrage opportunities quicker, especially if you're competing against the machine.

Which figures did you add, the buy or the sell from each stock page or, did you use the figures from the browse predictions? Had the figures changed between the time you bought and the time you sold? Four minutes is a very long time in stocks that are very active. What stocks did this happen with?

It was BUNDLE.GR.210811 which I thought would not exactly be on everybody's radar. I clicked through each stock and "watch"ed it, then on my portfolio screen I added up the "last price" figures and got 1.05 so i bought 100 of the bundle. I went to sell it straight away but found that I had to click through each stock to sell, hence the four minutes it took (there are 10 stocks in the bundle and I guess I was clicking at a somewhat leisurely pace) So I can appreciate that the prices may have changed as I was doing it but to lose $25 on it seems a bit much in that space of time.

One issue that concerns me is that a single trader can have a strong effect on the price. This adds complexity to the thought process I must undertake when considering buying or selling. When I buy the stock price rises, which means some current owners will hit their required return on the stock and dump it, causing the price to fall below where it started and I take a loss. This distorts the price signal especially near the bounds of 0 and 1. Clever traders that are sure of the event will nevertheless dump the stock to take their gains and put the cash into other stocks. So the price will not reflect the market's expectation of the event. It all makes for a very complicated problem for less clever traders (like me).



Edited 1 time(s). Last edit at 08/21/2011 03:54AM by mikadzuki.

mikadzuki: try the multi trade option, set up for exactly the issue you were having.

Thanks admin, yes I see the multi-trade interface now. Have done a bit more looking around and now see I was a bit stupid, not looking at the right prices. Anyway, with talk in the forums of traders using bots I think opportunities for arbitrage from simple humans such as I are limited. I think I'll just go back to hoping I have good luck, instead of expecting to beat the market.

mikadzuki - the bots must have been on holiday on Friday and Saturday, as you saw the sum of hte contract prices were a fair way from $1, around $1.06 for a while there, and that was Saturday afternoon a good day after launch. So there's room for you to move there.