Forward arbitrage means that the price ratio between futures and spot is higher than the upper limit of no-arbitrage range, and arbitrageurs can sell futures and buy spot with the same value at the same time. After the current spot price ratio falls back to the no-arbitrage range, they will close their positions at the same time to obtain arbitrage income.

The factors that affect forward arbitrage are the price of buying recent contracts, the price of selling forward contracts, storage fees, capital interest, value-added tax, transaction fees and delivery fees.

Their relationship with profit is as follows: arbitrage profit = selling forward contract price-buying recent contract price-storage fee-capital interest-value-added tax-transaction delivery fee.

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Arbitrage trading has the following characteristics compared with ordinary speculative trading:

1, low risk

The price difference between different futures contracts is far less drastic than the absolute price level, which reduces the risk accordingly. In particular, the risk of unexpected events affecting the disk surface is avoided. Due to bilateral positions, it is difficult for the main institutions to force arbitrage traders to reduce their positions.

2. Facilitate the entry and exit of large funds.

Arbitrage itself needs a lot of money, so it can attract large funds to enter the market.

3. Long-term stable interest rates.

The profit of arbitrage trading is not as ups and downs as unilateral speculation, and arbitrage trading is operated by using the unreasonable price difference relationship in the market. In most cases, the unreasonable spread will soon return to normal, so the success rate of arbitrage trading is very high.

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