What are the basic operating methods of bull market spread and bear market arbitrage?
The basic method of 1 Niu San is for traders to buy recent contracts and sell forward contracts at the same time, hoping that the price increase of recent contracts is greater than that of forward contracts, or the decline of recent contracts is less than that of far contracts.
The basic operation method of bear market arbitrage is to sell the recent delivery monthly contract and buy the forward delivery monthly contract, hoping that the decline of the forward contract during the price decline is less than the recent contract price decline.
So what is the principle of bull market spread and bear market arbitrage?
Bull market spread and bear market arbitrage use the fluctuation of spread to make money.
In the bull spread, after opening the position, if the spread between contracts is reduced and the position is closed at the same time, you can get the income, and the income of the bull spread = opening spread-closing spread.
When carrying out bear market arbitrage, after opening a position, if the spread between contracts is enlarged and the position is closed at the same time, you can get income. The income of bull spread = position spread-position spread.
This is bull market and bear market arbitrage. I hope it helps you.