Time arbitrage refers to buying and selling the same assets delivered at different times at the same time, including futures arbitrage and spot arbitrage. Spatial arbitrage refers to the trading behavior of buying an asset at a low price in one market and selling the same asset at a high price in another market, thus earning the price difference between the two markets. Tax arbitrage refers to an arbitrage transaction that takes advantage of the differences in tax treatment between different investors, different securities and different income sources.
Tool arbitrage is the act of earning risk-free profits by buying low and selling high by using the price difference between the spot of a target asset and derivative securities. Risk arbitrage refers to the trading behavior of earning risk-free profits by buying low and selling high by taking advantage of the difference in risk pricing.
Generally speaking, arbitrage refers to people buying and selling two different types of futures contracts at the same time. Traders buy contracts that they think are "cheap" and sell those "high-priced" contracts at the same time, benefiting from the changing relationship between the prices of the two contracts. In arbitrage, traders are concerned about the mutual price relationship between contracts, not the absolute price level.
Arbitrage can generally be divided into three categories: intertemporal arbitrage, cross-market arbitrage and cross-commodity arbitrage.
Arbitrage is a mature investment model. Compared with one-way speculative trading, it has the characteristics of less risk and more stable income, which is very suitable for investors with large amount of funds and stable style. In practice, because spot trading is related to many stocks placing orders at the same time, good arbitrage software is very important.
The arbitrage software of stock index futures jointly launched by China Merchants Securities and China Merchants Futures Company is an execution platform that can realize cross-market and multi-variety programmed trading. Through real-time, complete and accurate data analysis, we can find arbitrage opportunities between stock index futures and spot, execute a series of transactions in time, and expand various trading methods such as futures inter-period arbitrage and automatic trading of a basket of stocks.
Risk-free arbitrage is a kind of intertemporal arbitrage, which is an operation mode of how to grasp the main position and end the transaction through hedging or delivery when the price difference between contracts of the same commodity with different delivery months changes abnormally, and how to establish equal positions of the same futures commodity with different contract months in the opposite direction. Of course, there are few "risk-free" arbitrage opportunities that meet this condition of stable return. Once it happens, it will often attract funds to actively participate.