Time-zone arbitraging?

[globevestor]

Gold closing price was US$596.30 for New York Market on 13/4/06. On 17/4/06, gold spot price is around US$604. Markets in US, UK and Australia are closed on 17/4/06. If the price hike is sustainable, it will create pressue for momentum players in these markets to push up gold price again when their markets are opened after holiday. More details can be found
here. So do you take advantage of such situation? If you do, which country will you choose to open an account to take advantage of such situation?

 

[peto]

Not possible. The only option now is to buy/sell in Asia at the already-higher price. The other markets are currently closed as you point out. When they open they will likely gap up immediately to the current price.

Or perhaps the Asian quotes will fall as Europe opens tomorrow near its Thursday closing price. Fading that in Asia now is a gamble, not arbitrage.

 

[globevestor]

How about buy funds which hold securities that are currently not tradeable? For example, on 17/4/06 buy funds in Asia which hold securities in UK, US, etc. I think the fund manager has to give NAV at the end of the day even though some of the securities in the fund are not tradeable for 17/4/06, e.g. UK securities.

I agree the risk is the price may fall when these closed markets are opened again.