Friday, October 30, 2009

Silver Wheaton: SLW vs SLW.TO, Can You Profit From the Difference?

Silver Wheaton today is down 4.6% in New York (NYSE), while it is down 3.4% in Toronto (TSX). Investors may be thinking of a conspiracy, or whether it is possible to profit from this (through arbitrage).

As of 10:46AM:

- SLW was trading at $12.52, its close yesterday was $13.12: -4.6%
- was trading at $13.52, its close yesterday was $14.00: -3.4%

The difference is simply explained by the exchange rate. The Canadian dollar as of 10:46AM was off by 1.3% versus the USD. Therefore, SLW is today worth 1.3% more in CAD, so its CAD price is higher by 1.3%. There is no magic or conspiracy here.

These charts are of around 11AM:

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