If you want to know what investment arbitrage means, you must first understand what "arbitrage" is. Arbitrage is an investment strategy that uses fixed-income assets, such as bonds or interest rate futures. Investors can take advantage of the spread of bond or futures trading to get some income. Carry investment is to earn spreads by buying bonds or futures in high-interest currencies and selling bonds or futures in low-interest currencies at the same time.

Risks and returns of investment arbitrage

When it comes to the strategy of investing in carry, it must be noted that this investment strategy also faces certain risks. The risk of this strategy mainly comes from the risk of foreign exchange fluctuation and interest rate fluctuation. If the currency exchange rate or interest rate changes greatly, investors who invest in carry may face losses. But correspondingly, investors who invest in carry may also get relatively high returns, which may be higher interest rate returns than traditional fixed-income investments.

Arbitrage investment can be used in different investment fields, such as foreign exchange, closely related commodity futures market and bond market. In the foreign exchange market, investors can make profits by buying high-interest currencies and selling low-interest currencies. In the commodity market, investors can make intertemporal transactions to take advantage of the carry trade strategy of commodity futures. In the bond market, investors can buy long-term bonds and sell short-term bonds to obtain so-called long-term arbitrage.