Legal arbitrage is a trading method, which is common in financial markets. Stocks, funds, commodities, foreign exchange and convertible bonds also have arbitrage space.
Arbitrage is also called spread trading. Arbitrage refers to buying or selling an electronic trading contract while selling or buying another related contract. Arbitrage trading refers to trading in the opposite direction in related markets or related electronic contracts by taking advantage of the price difference changes between related markets or related electronic contracts, and making profits in the expectation of price difference changes.
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Arbitrage of stock index futures refers to the behavior of taking advantage of the unreasonable price of stock index futures market, participating in the trading of stock index futures and stock spot market at the same time, or trading stock index contracts with different maturities and different (but similar) categories at the same time to earn the difference. Stock index futures arbitrage is divided into futures arbitrage, intertemporal arbitrage, cross-market arbitrage and cross-variety arbitrage.
Similar to the hedging of stock index futures, commodity futures also have arbitrage strategies. When buying or selling a futures contract, they sell or buy another related contract and close both contracts at a certain time. Arbitrage only buys and sells contracts in the futures market, and does not involve spot trading. There are four kinds of commodity futures arbitrage: spot arbitrage, intertemporal arbitrage, cross-market arbitrage and cross-variety arbitrage.
Different from risk-free arbitrage, statistical arbitrage is a kind of risk arbitrage by using the historical statistical law of securities prices, and its risk lies in whether this historical statistical law will continue to exist in the future. The main idea of statistical hedging is to find several pairs of investment products (stocks or futures, etc.). ) Use the best correlation first, and then find out the long-term equilibrium relationship (cointegration relationship) of each pair of investment products.
Option arbitrage is a derivative financial instrument based on futures. The essence of option is to price the rights and obligations in the financial field separately, so that the transferee of the right can exercise his right to trade or not to trade within a specified time, and the obligor must perform it.
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