The reasons for the price difference are complicated. For example, the geographical environment is different, the relationship between supply and demand is different, the labor price is different, and the culture is different. And mastering the law of price difference seems to be a necessary condition for businessmen to make profits. The essence of the price difference is the monetary expression of some commodity values realized in the circulation process.
Commodity price difference refers to the price characteristics of the same commodity in the circulation process due to the differences in purchase and sale links, purchase and sale areas, purchase and sale seasons and commodity quality. The basic elements of commodity price difference are circulation cost and commercial profit. The specific forms of national taxable commodity price difference generally include: purchase and sale price difference, wholesale and retail price difference and regional rent.
Basic application of price difference:
The price difference sometimes manifests as a premium, and sometimes it is a premium. Hedging arbitrage is a kind of market trading method that makes use of the price difference between futures contracts to make profits. The key factor of arbitrage is the change of price difference.
The spread will expand and shrink, but when the spread between two futures contracts is abnormal, it provides an arbitrage opportunity for traders. The difference in price is related to profit. The real difficulty for arbitrageurs is how to capture the biggest difference in prices under the same trend.