TakuanDB operates a stat arb machine which does exactly that. It...

Takuan

DB operates a stat arb machine which does exactly that. It is the largest in the Aussie market and it is rumoured to have a double digit portion of all shares daily traded on the ASX. There are a number of other players but I think they are all a bit smaller. Susquehanna definitely has one too so does Tibra ...and I think Citybank used to operate one too. There are a number of factors how they calculate the fair value at any given time. But interest rate, time to expiry, dividends, franking credits and transaction costs are probably the main one.