The movie “-Babel”- seems quite hot at HSX for the Oscar of the Best Picture…- and not so hot at TradeSports. Since HSX’-s track record is quite impressive regarding Oscars predictions, I would use HSX info to speculate at TradeSports.
Agree, disagree?
This is an easy ‘disagree’.
Two problems. One is liquidity. There’s more play money liquidity going on at HSX than there is on Tradesports. The bid-ask is roughly 5% and 10%, a two-fold difference.
The other is measurement. It’s nearly impossible to tell how much ‘value’ you can extract out of the market.
Let’s pretend HSX says 90% and Tradesports says 10%. How do you arbitrage these? How would you know the true value is between 11 to 89%?
Apples and oranges.
Sacha, CFM did not mention arbitrage. HSX could be an indicator that the TS price is wrong and in which direction, which is enough for a TS trader to place an order.
Exactly!!!!