Positive arbitrage means that the price ratio of futures and spot is higher than the upper limit of no arbitrage range. Hedging, that is, reverse arbitrage, means that the price ratio of futures and spot is lower than the upper limit of no-arbitrage range. No-arbitrage interval refers to the fluctuation interval of futures theoretical price after considering transaction costs. Generally speaking, forward arbitrage means buying near month and throwing far month, while reverse arbitrage means buying far month and throwing near month. In futures arbitrage trading, investors buy or sell futures market contracts at the same time or similar time, and sell or buy corresponding securities or other related assets with the same value in the spot market. Take corn futures as an example. The trading code of corn futures is C. C 1-3, which refers to buying C 1 month contracts and selling March contract arbitrage; C3- 1 hedging refers to the arbitrage of buying contracts in March and selling contracts in June. When arbitrage is carried out, it is necessary to determine the no-arbitrage interval, which is often difficult to judge and has many influencing factors.

Arbitrage:

Arbitrage is also called "interest arbitrage". There are two main forms:

(1) No arbitrage. That is, using the interest rate difference between the capital markets of the two countries, short-term funds will be transferred from the low interest rate market to the high interest rate market to obtain spread income.

(2) arbitrage. That is to say, the arbitrageurs use forward foreign exchange transactions to avoid the risk of exchange rate changes while transferring short-term funds from place A to place B for arbitrage. Arbitrage will change the relationship between supply and demand in different capital markets, make the short-term capital interest rates in different places tend to be consistent, narrow the difference between the recent exchange rate and the forward exchange rate of money, and keep the interest rate difference in the capital market in balance with the exchange rate difference in the foreign exchange market, thus objectively strengthening the integration of international financial markets. However, a large number of arbitrage activities will lead to a large-scale international flow of short-term capital and aggravate the turmoil in the international financial market.

Definition and characteristics:

Arbitrage is also called spread trading. Arbitrage refers to buying or selling an electronic trading contract while selling or buying another related contract. Arbitrage trading refers to trading in the opposite direction in related markets or related electronic contracts by taking advantage of the price difference changes between related markets or related electronic contracts, and making profits in the expectation of price difference changes.

Arbitrage, also known as arbitrage, usually refers to buying a physical asset or financial asset at a lower price and selling it at a higher price when there are two prices (in the same market or in different markets), thus obtaining risk-free income. Arbitrage refers to the act of making profits by correcting the abnormal situation of market price or yield. Abnormal situation usually refers to the behavior that the price of the same product is significantly different in different markets, that is, arbitrage means buying low and selling high, which leads to the price returning to equilibrium level. Arbitrage usually involves establishing a position in one market or financial instrument and then establishing a position in another market or financial instrument to offset the previous position. After the price returns to the equilibrium level, you can close your position and take profit. Arbitrator refers to an individual or institution engaged in arbitrage.

Trying to profit from the price difference of the same or similar financial products in different markets or in different forms. 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. The ideal state is risk-free arbitrage. Arbitrage used to be a trading technique used by some alert traders, but now it has developed into a technique to profit from the small price difference of the same securities in different markets with the help of complex computer programs.