1. Discount arbitrage:
Discount arbitrage refers to obtaining income by buying low and selling high when there is a price difference between the sub-share and the parent share of the graded fund. When the price of the child share is lower than its intrinsic value and the price of the parent share is higher than its intrinsic value, arbitrage can be carried out by buying the child share and selling the parent share.
2. Premium arbitrage:
Premium arbitrage refers to obtaining income by selling high and buying low when there is a price difference between the sub-shares and the parent shares of graded funds. When the child share price is higher than its intrinsic value and the parent share price is lower than its intrinsic value, arbitrage can be carried out by selling the child share and buying the parent share.
3. Event arbitrage:
Event arbitrage refers to the arbitrage when graded funds encounter specific events (such as dividends, conversion, etc.). ) By seizing the opportunity of price fluctuation brought by the event. For example, before the fund pays dividends or converts into shares, the prices of sub-shares and parent shares usually change, and then arbitrage can be carried out by buying and selling sub-shares and parent shares.
4. Cross-market arbitrage:
Cross-market arbitrage refers to arbitrage by using the price difference between graded funds in different markets (such as A-share market and Hong Kong stock market). When the price of the same graded fund is different in two markets, we can arbitrage by buying the fund in the lower-priced market and selling it in the higher-priced market.
It should be noted that there are certain risks in graded fund arbitrage, such as market risk and liquidity risk. In the process of arbitrage, it is necessary to fully understand the mechanism, market environment and potential risks of graded funds, and formulate reasonable arbitrage strategies on this basis. At the same time, because arbitrage opportunities are usually fleeting, investors need to have keen market insight and quick response ability.