Wondering what the best way to go about cashing in on a potential arbitrage play would be. Volkswagens preferred stock (VWAPY) and common stock (VWAGY) are exactly the same except for the fact that the common stock has voting rights whereas the preferred stock does not. Currently the common stock trades at a 30% premium to the preferred stock, when they are identical except for voting rights.
The reason for this huge discrepancy is that most American retail investors don't know the difference between the two or that VWAPY even exists. Tbf, the voting rights should give the common stock a slight premium, but nowhere near 30% imo. My question is: How do I 'play' this situation? Buy puts on VWAGY? Calls on VWAPY? Just buy VWAPY knowing its discounted?
Leave a Reply