Business Description
Invest in Risk Free Arbitrage Fund
Simultaneous purchase and sale of an asset in order to profit from a difference in the price is called Arbitrage. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms.
DGCX provides SDMA setup for large corporate clients where a client can have API connections with exchange and co-locate their server with DGCX for a better connectivity and faster trade execution.
Indian Rupee vs. US Dollar is a favorite arbitrage product at DGCX.
INR/Dollar contract which is also known as DINR is traded on DGCX (Dubai Gold & Commodities Exchange). This contract is a Future contract and has all the specifications as any Exchange Traded Instrument. Same INR/Dollar contract is also traded in NDF Market (Non Deliverable Forward Market) which is basically an OTC (Over the counter) market based in Singapore and Hong Kong.
In the strategy, an arbitrage is created between these two contracts.
Advantages:
Near risk free arbitrage
Easy to enter and exit
Striking returns as compared to interest rates in International Markets (1%-2%)
Huge liquidity in both the markets so bigger funds can be easily deployed
Lesser margin requirements as a percentage of exposure
As contracts are traded in the same currency, there is no risk of currency fluctuation
