Post by
BadgerBob on Jun 23, 2021 10:01am
Don't spite your face....
You can hate the idea of losing ELY but don't give it away here. Morgan Stanley is the usual conduit for the Van Eck index to buy positions in their member stocks. Notice that it is MS that has been picking away at ELY. That means they are either shorting GROY and replacing it with a cheaper version thru ELY. This is a classic arb situation. You need GROY shares for your index? No problem, just buy ELY and convert at .245 for 1. Morgan Stanley is buying your shares today at
1.28 and effectively getting GROY at (1.28/.245 x .815 = $4.25 US) You are selling them GROY at
$4.25 US and it's trading at $5.70 !!!!! A very quiet and very profitable arb. Be patient, this arb will close.