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Can an arbitrage trade be carried out between two exchanges?

Yes, an arbitrage trade can be carried out between two exchanges. However, it is only possible if the stocks are already held in the demat account.

Example Scenario

  1. Assuming Reliance stock is trading at ₹2600 on NSE and ₹2604 on BSE, an intraday arbitrage trade can be executed if it's already held in the demat account.
  2. The strategy involves selling the stocks from the holding on BSE at ₹2604 and buying them back instantly at ₹2600 on NSE.
  3. This trading approach is commonly referred to as arbitrage, where the focus is solely on exploiting the price difference between Reliance shares on the NSE and BSE, regardless of the direction of Reliance's price movement.