If a future is selling for less than the underlaying, can you always make $ by shorting the stock & buying the

Question

future?

Answer 1

No.

Sometimes there are no shares available to be sold short. And don't forget that if you are short the stock you must pay any dividends.

Answer 2

Earn money-

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Answer 3

It is unlikely that your "if" is a reality because of two factors:

(1) the cash proceed, less the futures engagement premium, of the short sales has time value, that is you or your broker can use it to earn interest and can still have the stock at the futures date, and

(2) the risk of fluctuation with time of the stock to the futures date. (However, prior to a severe downturn, the yield curve did get inverted at times.)

In rare cases when the present stock price is pegged to some valuation due to certain conditions, your "if" might be a reality.  In that case, you are still not guaranteed a profit.  Futures is a one way contract but only executable on the due date, whereas American option is exerciable from the buy date to the expiration date.  Because of that one-date restraint you are at risk ultimately losing money when the price on the due date is lower than your call strike price by an amount exceeding the original net gain.  In addition, such a transaction has a risk of hidden coverage maintenance cost, e.g. when the stock price rises and your terms with your broker house do not exclude an interim margin call.  Your specific tax details are also relevant factors.