1 thought on “How to arbitrage for futures contracts?”
Ivan
Arbitrage: Refers to buying and selling two different types of futures contracts at the same time.nArbitrage can generally be divided into three categories: cross -term arbitrage, cross -market arbitrage and cross -commodity arbitrage.n1. Sort -term arbitrage is the most common type in arbitrage transactions. It is used to make a profit when the normal price gap between the same product but different habitats is made of a bull market (Bull Spread) and the bull market (Bull Spread) and Bear Spread (Bear Spread. For example, in the bull market arbitrage, buy a metal contract that recently traded month, and sell metal contracts in the long -term delivery month. The amplitude; the opposite of the bear market arbitrage, that is, selling the recent delivery month contract, buying a long -term delivery month contract, and hoping that the price decline in the long -term contract price is less than the price of the recent contract.n2. Cross -market arbitrage is a arbitrage trading behavior between different exchanges. When the same futures commodity contract is traded on two or more exchanges, due to the geographical differences between regions, there is a certain price difference between various product contracts. For example, the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) are conducting cathode copper futures transactions. Several market differences between the two markets exceed the normal range each year. Chance. For example, when the price of LME copper is lower than the SHFE, traders can sell the copper contract for SHFE while buying the LME copper contract. When the two market price relationships are restored to normal That's true. When doing cross -market arbitrage, we should pay attention to several factors that affect the price difference of each market, such as freight, tariffs, exchange rates, etc.n3. Cross -commodity arbitrage refers to the use of two different, but the spreads between but related products for transactions. Between these two commodities are interdependent or restricted by the same supply and demand factors. The transaction form of cross -commodity arbitrage is to buy and sell the same delivery month but different types of commodity futures contracts at the same time. For example, between metal, between agricultural products, and between metal and energy, arbitrage transactions can be performed.nThe reason why traders conduct arbitrage transactions are mainly because of the low risk of arbitrage, arbitrage transactions can provide some protection for the unexpected or losses caused by violent price fluctuations, but the profitability of arbitrage is also more direct transaction than direct transactions. Small.n(Southern Wealth Network Futures Channel)n(Editor in charge: Zhang Yu)
Arbitrage: Refers to buying and selling two different types of futures contracts at the same time.nArbitrage can generally be divided into three categories: cross -term arbitrage, cross -market arbitrage and cross -commodity arbitrage.n1. Sort -term arbitrage is the most common type in arbitrage transactions. It is used to make a profit when the normal price gap between the same product but different habitats is made of a bull market (Bull Spread) and the bull market (Bull Spread) and Bear Spread (Bear Spread. For example, in the bull market arbitrage, buy a metal contract that recently traded month, and sell metal contracts in the long -term delivery month. The amplitude; the opposite of the bear market arbitrage, that is, selling the recent delivery month contract, buying a long -term delivery month contract, and hoping that the price decline in the long -term contract price is less than the price of the recent contract.n2. Cross -market arbitrage is a arbitrage trading behavior between different exchanges. When the same futures commodity contract is traded on two or more exchanges, due to the geographical differences between regions, there is a certain price difference between various product contracts. For example, the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) are conducting cathode copper futures transactions. Several market differences between the two markets exceed the normal range each year. Chance. For example, when the price of LME copper is lower than the SHFE, traders can sell the copper contract for SHFE while buying the LME copper contract. When the two market price relationships are restored to normal That's true. When doing cross -market arbitrage, we should pay attention to several factors that affect the price difference of each market, such as freight, tariffs, exchange rates, etc.n3. Cross -commodity arbitrage refers to the use of two different, but the spreads between but related products for transactions. Between these two commodities are interdependent or restricted by the same supply and demand factors. The transaction form of cross -commodity arbitrage is to buy and sell the same delivery month but different types of commodity futures contracts at the same time. For example, between metal, between agricultural products, and between metal and energy, arbitrage transactions can be performed.nThe reason why traders conduct arbitrage transactions are mainly because of the low risk of arbitrage, arbitrage transactions can provide some protection for the unexpected or losses caused by violent price fluctuations, but the profitability of arbitrage is also more direct transaction than direct transactions. Small.n(Southern Wealth Network Futures Channel)n(Editor in charge: Zhang Yu)