Albert Alfonso: KMR and KMP pay the same dividend, but one in shares (KMR), one in cash (KMP). both move in tandem because they are the same company.
11/2/12
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Albert Alfonso: KMR always lags KMP, the gap has been as low as 5%, and as high as the low teens. so, if you think KMR will close the gap, you can short KMP
11/2/12
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Albert Alfonso: and with the cash go long KMR, KMPs div is smaller than KMRs, so you get a small yield (though you have to sell the kmr shares you receive)
11/2/12
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Albert Alfonso: so basically a free yield, (though your broker will charge you to go short kmp) this is a form of arbitrage
11/2/12
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Sumflow: $KMR.Place resting orders to get out when the spread narrows. You will be taking profits all of the time because spreads fluctuaute.
12/9/12
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Sumflow: $KMR.It would be like free money, except you have to work for it. There will be slippage and fees.
