The main purpose of arbitrage operation is to take less risks and get relatively stable returns at the same time. The purpose of hedging is to transfer risk, not profit. In many successful cases of hedging, future positions often loses money, but as long as the profit and loss of the futures and spot markets are basically balanced, the purpose of hedging is achieved.

The second foundation is different:

Hedgers generally hold positions in the spot, or expect to hold spot positions, so a reverse future positions is set up in the futures operation place to manage spot risks, that is, if there is no operational demand in the spot market, they will not hold future positions. On the other hand, arbitrage is different. Its multi-position, short position and spot position are all part of arbitrage operation, and the arbitrageur gains profits from the relative price difference of these positions.

The scope of the third market is different:

Hedging only involves the spot and futures markets. In the arbitrage operation, the operator can carry out spot arbitrage in futures and spot at the same time, or only arbitrage in futures operating places: or arbitrage between different delivery months of the same variety, arbitrage between different varieties in the same delivery month, or arbitrage between different futures operating places.

Fourth, according to different:

Hedging is based on the consistency of futures business premises and spot price changes. The more consistent the trend and range of changes, the better the hedging effect. Arbitrage operators use the unreasonable price difference between futures and spot, or between futures contracts to obtain arbitrage profits. The greater the unreasonable price difference, the greater the profit of arbitrage operations.