It refers to the trading behavior of using the price difference between related markets or related contracts to conduct transactions in the opposite direction in the related markets or related contracts, with a view to profiting from the favorable changes in the price difference. If the spread between the futures market and the spot market is used for arbitrage, it is called spot arbitrage. If the spread between different contracts in the futures market is used for arbitrage, it is called spread trading. It is precisely because of arbitrage in the futures market that it greatly enriches the operation mode of the market and enhances the artistic characteristics of investment and trading in the futures market. At the beginning of carry trade, most people in the market regarded it as a speculative activity. With the increasing influence of ordinary trading activities, arbitrage trading is generally regarded as an independent trading method that plays a specific role and is different from speculative trading. The technology of arbitrage in futures market is very different from that of market makers or ordinary investors. Arbitrators use the price difference of the same commodity between two or more contracts, not the price of any contract. Therefore, their potential profits are not based on the rise or fall of commodity prices, but on the expansion or contraction of the price difference between different contract months, thus forming their arbitrage trading positions.
Liquidation of assets:
Asset liquidation is a special accounting method to check and check all kinds of property, find out the actual amount of property, monetary funds and settlement funds, and determine whether the book balance is consistent with the actual balance, so as to ensure that the accounts are consistent with the facts. Asset liquidation is a procedure to end the existing legal relationship, dispose of its remaining property and make it disappear. Liquidation is a legal procedure. When an association is cancelled, it must be liquidated. An act that terminates itself without liquidation has no legal effect and is not protected by law. Asset liquidation is a special accounting method to check and check all kinds of property, find out the actual amount of property, monetary funds and settlement funds, and determine whether the book balance is consistent with the actual balance, so as to ensure that the accounts are consistent with the facts. Asset liquidation is a part of the internal containment system, and its purpose is to regularly determine whether the implementation of the internal containment system is effective. In the daily work of enterprises, under the premise of considering costs and benefits, we can choose the appropriate scope and timing of asset liquidation. In other words, asset liquidation can be properly classified according to its implementation scope and time interval.
Some types of protective hedging:
Take protective hedge funds as an example. Protective hedge fund is a concept, and there are many sayings. This definition has two characteristics. First of all, protective hedge funds mainly use financial derivatives for speculation. Second, protective hedge funds have investment strategies and are very conscious. These investment strategies are characterized by manipulating prices and financial markets to make profits.
In the most basic protective hedging operation, the fund manager buys a put option with a certain price and term after buying a stock. The utility of put option is that when the stock price falls below the option-limited price, the holder of seller option can sell his stock at the option-limited price, thus hedging the risk of stock decline. The early hedge fund can be said to be a form of fund management based on the conservative investment strategy of hedging. At present, hedge funds have become synonymous with a new investment model, that is, based on the latest investment theory and extremely complex financial market operation skills, making full use of the leverage of various financial derivatives, taking high risks and pursuing high returns.
In finance, hedging means that one investment deliberately reduces the risk of another investment. This is a way to reduce business risks while still making profits from investment.
Hedging is the most common in the foreign exchange market, aiming at avoiding the risk of one-way trading. The so-called single-line trading means buying short positions (or short positions) when you are optimistic about a certain currency, and selling short positions (short positions) when you are bearish on a certain currency. If the judgment is correct, the profit will naturally be more; But if the judgment is wrong, the loss will not be greater than not hedging.
The so-called hedging is to buy a foreign currency at the same time and short it. Besides, we should also sell another currency, that is, short selling. In theory, shorting a currency and shorting a currency should be the same as the silver code, which is the real hedging, otherwise the hedging function cannot be realized if the two sides are different in size.
This is because the world foreign exchange market is based on US dollars. All foreign currencies rise and fall with the US dollar as the relative exchange rate. A strong dollar means a weak foreign currency; If the foreign currency is strong, the dollar will be weak. The rise and fall of the dollar affects the rise and fall of all foreign currencies. Therefore, if you are optimistic about a currency, but want to reduce the risk, you need to sell a bearish currency at the same time. Buy strong currency and sell weak currency. If the estimate is correct, the dollar will weaken and the strong currency bought will rise. Even if the estimate is wrong and the dollar is strong, the currency bought will not fall too much. The weak currency sold has fallen sharply, with less losses and more gains, and it can still be profitable on the whole.