When the spot price is greater than the net value of the fund, we call it a premium, and when the spot price is less than the net value of the fund, we call it a discount. In both cases, LOF funds usually have arbitrage opportunities.
1, shortly after product transformation or new product listing, when there are few arbitrageurs, when new product listing or product transformation, many investors are unfamiliar with the rules (normal investment) and there are few arbitrageurs, resulting in a large deviation between the initial price and the actual net value.
If the E Fund is classified according to SSE 50, it will be converted into LOF on April 27th, 20 15. If it is bought at a price close to the closing price of the day 1.02 1 1, it can be redeemed at the net value before closing 1.05 1 (the updated net value of the day), and the fee will be deducted by 0.5.
2. When the market is crazy and the discount premium in the market is high.
When the market is crazy, such as a short-term bull market and a stock market crash bear market, it is easy to have a large premium or discount, thus generating arbitrage opportunities.
Let's take Guangfa's small-cap stock LOF as an example. On July 8, 20 15, due to market panic, the small-cap market price of Guangfa fell by 9.98%. If you buy at a price of 2.245 on the same day and redeem at a net value of 2.4076 on the 9th, you can get an arbitrage income of 6.7 1%.