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Volvo OTC: Arbitrage computers asleep at the job?

Discussion in 'TSLA Investor Discussions' started by deonb, Sep 8, 2017.

  1. deonb

    deonb Supporting Member

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    Technical question here to people who have more experience with international investing.

    Why is there such a large difference between the OTC shares of Volvo and the Swedish Nasdaq listed ones?

    e.g. Per the graph on the bottom: The lines over the shared area below are VOLV A and VOLV B - which track almost identically on top of each other - expected. The 2 free lines (orange/yellow) are VOLVF and VLVLY, which aren't identical, but since these trade in low volume it's not unexpected - and they're still close to each other.

    But why the large difference between the Swedish Nasdaq issue and American OTC issues?

    Any arbitrage computer should have had a field day with this. Are there large conversion costs or taxes involved that causes them to drift by that much?

    upload_2017-9-8_5-41-23.png
     
    • Informative x 1
  2. Tiger

    Tiger Member

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    I'll just have to pull this out of my hat: different currency?
     
  3. deonb

    deonb Supporting Member

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    Good call and could be, but not the whole story. Since January there has been a 13% change in the value of the currency, but a 20% drift in the stock prices.
     

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