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What are arbitrage trading and unilateral trading?
In the futures market, arbitrage and unilateral trading are recognized by different groups. The fact is that most people can accept unilateral trading and think that unilateral trading is flexible, with many opportunities and quick profits, but most people can't understand arbitrage trading. In fact, on closer examination, the difference between the two is obvious, and everyone has his own judgment.

First, the utilization rate of funds is obviously different. Unilateral trading often uses light warehouse to attack, focusing on quickly and repeatedly grasping opportunities and making profits in order to realize capital appreciation. Usually no more than half a warehouse. In arbitrage trading, once you find an opportunity, you can completely open more than half, or even about 90%, and make a profit through the high utilization rate of funds.

Second, the use of time is obviously different. When trading unilaterally, whether it is short-term or long-term, funds should be idle most of the time, and the time for using funds is very limited. In arbitrage trading, most of the time is spent using funds, and there is little free time. Arbitrage trading has obvious advantages in exchanging time for space.

Third, the transaction costs are obviously different. In unilateral transactions, except for long-term traders who make trends, they frequently go in and out, which increases the expenses of handling fees. In arbitrage trading, long holding time and few trading times can greatly reduce transaction costs.

Fourth, there are obvious differences in psychological feelings. In unilateral trading, traders are under great psychological pressure, because any unexpected situation may happen. Under pressure, investors often can't operate normally, even if they judge the correct position, they may not be able to hold on. Hedging in arbitrage trading limits the range of profit and loss of positions, reduces the psychological impact of market fluctuations on traders, is conducive to the stability of mentality, and can better hold positions that they think are reasonable.

Fifth, the profit opportunities are obviously different. Although unilateral trading can make profits by changing the trading direction at any time according to market changes, multiple orders can only make profits when the price rises, and empty orders can only make profits when the price falls.