5 thoughts on “What does arbitrage in futures mean?”

  1. The arbitrage in the futures is a cross -period arbitrage. Cross -term arbitrage is the most common type in arbitrage transactions. It is the use of the same product but the normal price gap between the same commodity but different habits of the month. Bull Spread) and Bear Spread (Bear Spread. For example, when the metal bull market arbitrage is made, the exchange buys a recent metal contract for the recent delivery month. The price of long -term contract prices rose; the bears arbitrage is the opposite, that is, 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.
    Extended information
    The risk of arbitrage
    1, transaction risk
    usually two or three transactions cannot be strictly completed at the same time, so there is a possibility of the exposure of some transactions and price fluctuations in the combination of arbitrage, while the positioning of the liquidation is lined up The possibility cannot guarantee that the transaction is carried out at a profit price. Different market transactions also bring risks to arbitrage. For example, arbitrage found that IBM's stock price has a profit space between the New York Stock Exchange and the London Stock Exchange. However, due to the inconsistency of the New York Stock Exchange and the London Stock Exchange trading period, he cannot complete the investment portfolio operation at the same time at the same time.
    2, invalid pairing
    another risk of arbitrage transactions comes from the price of both buyers and sellers. The relationship is invalid at the same time. The arbitrator may think that there is a close price correlation between a pair of assets. Their selling price is overvalued assets, and the purchase price is underestimated assets. They hope to make profits by reducing the gap between assets in the future. Human judgment may be wrong. Due to market fluctuations, the price correlation of the asset portfolio will also fail for a long time. This arbitrage transaction will face the risk of exceeding expectations.
    3. Fund delivery, so there is a risk of trading opponents' defaults and unable to pay funds. If there is only one trading opponent or multiple affiliated transactions involving one transaction opponent, the risk will be further increased, especially in the financial crisis, many trading opponents default, through leverage, through leverage Enlargement risk.
    Reference materials Source: Baidu Encyclopedia -arbitrage

    Reference materials Source: Baidu Encyclopedia -Futures arbitrage

  2. Hello, futures arbitrage refers to transactions that use the price difference between related markets or related contracts to conduct the opposite direction of transactions, in order to make a profitable transaction behavior in the price difference and make a profit. Next, I will introduce it to you.
    If arbitrage behavior of the price difference between the futures market and the spot market, then it is called the current arbitrage. If the viability behavior of different contracts on the futures market occurs, it is called the spread transaction.
    is because of the existence of arbitrage in the futures market, which greatly enriches the market's operation method and enhances the artistic characteristics of the futures market investment transaction. When the price spread transaction first appeared, most people in the market regarded it as a kind of speculative activity, and as the transaction activity became more and more frequent, when the influence became greater, the arbitrage transaction was It is generally considered to be an independent nature of a specific role and speculative transactions with a specific role.
    Chef future arbitrage technology is very different from being a city business or ordinary investors. The arbitrage uses the price difference between two or more contracts, rather than the price of any contract.
    Therefore, their potential profits are not based on the rise or decline of commodity prices, but the expansion or reduction of the price difference between the month between different contracts, which constitutes the position of their arbitrage transactions. rn  正是由于期货套利交易的获利并不是依靠价格的单边上涨或下跌来实现的,因此在期货市场上,这种风险相对较小而且是可以控制的,而其收益则是Relatively stable and relatively good operation methods are favored by large and institutional investors.
    In from a mature trading experience abroad, this method is regarded as a key to large funds to obtain stable returns. It can be believed that after the launch of stock index futures in my country, this relatively small arbitrage behavior must also be less risky. It will happen frequently in the market.
    This information does not constitute any investment suggestions. Investors should not replace their independent judgment or make decisions based on these information. If it operates on its own, please pay attention to position control and risk control.

  3. The arbitrage in the broad sense is a profit method in the capital market, which has a wide range of meaning. Here is a brief discussion on futures arbitrage
    It the best way to understand the futures set is to download the Flush Shipping Discussion, and feel it by simulating the disk to experience it.
    Futures arbitrage refers to the use of changes in the price difference between related markets or related contracts, and conduct reverse transactions on related markets or related contracts in order to make a transaction behavior that changes in the price difference.
    Themaneous arbitrage strategy for the following:
    The first, the current arbitrage
    The current arbitrage refers to the arbitrage mode of the inverse operation of spot and futures. It is widely used in interest rate futures and stock index futures markets. Essence The arbitrage will buy or sell existing goods in the spot market. According to the same target assets, it will sell or buy the futures contract in the futures market at the same scale, and will be closed at the same time in the future.
    In fact, because the sales and selling ingredient stocks take a long time, and the market situation will change instantly, most people use computer programs to transaction automatically in practice. In other words, once the agent relationship between the index spot and the futures is broken, the computer will conduct arbitrage transactions based on pre -designed procedures.
    The second, cross -period arbitrage
    The cross -period arbitrage is usually carried out between futures with different periods of futures. Specifically, it refers to buying or selling a short -term financial futures, selling or buying another long -term financial futures with the same target assets, and at the same time of hedging these two at the same time when the short -term financial futures contract expires or before expiration Futures transactions.
    Compared with the current arbitrage, there is less restrictions on cross -term arbitrage. Cross -term arbitrage is carried out in the same market, and the futures market does not have a short -selling restriction. Therefore, cross -period arbitrage is a period of existing current profit in arbitrage transactions. The indicator of cross -period arbitrage is the basis difference. When the basal difference between the futures contract based on the different periods of the same target asset exceeds the normal range, it can obtain risk -free profits through cross -period arbitrage.
    third, cross -market arbitrage
    The cross -market arbitrage is mainly carried out in the long -term foreign exchange market, and is widely used in currency futures. The financial futures contract of one exchange, the same amount of the same financial futures contract of the same, the same period of the trading of another exchange, and the transaction that preserves value in the future in the future.

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