Many people say that their arbitrage hedging is a wrong concept. A very common method is to make long and short soybean oil and soybean meal in the commodity market, and then expect soybean oil to rise and soybean meal to fall, but if the market completely reverses, this is normal. This practice is actually not arbitrage, but to do more soybean oil and reduce the spread of soybean meal. Because this kind of operation does not avoid the uncertainty of price. So the real arbitrage difference is 1800. So are there institutional investors doing such transactions? The most famous thing is that Everbright Oolong refers to the team that does ETF arbitrage. They take advantage of their channel advantages in securities companies and use algorithms to quickly find and place orders in two markets. However, due to program bugs, when buying a basket of stocks in the primary market, the number of orders dropped by dozens of times, which led to a sudden increase in the prices of constituent stocks in the ETF portfolio. The market fluctuated greatly that day, and finally Yang Jianbo was banned from entering the market.

In the gold futures market, if the supply is insufficient and the demand is relatively strong, the price of gold futures contracts in recent months will increase more than that of forward gold futures contracts, or the price of gold futures contracts in recent months will decrease less than that of forward gold futures contracts. Traders can buy gold futures contracts and long spreads in recent months. Buying hedging: first buy in the futures market, and then sell hedging in the spot market. Buy hedging, when the basis is strong, there is a net loss; On the contrary, if the basis weakens, there will be net income. Sell hedging: sell it in the futures market now, then buy hedging in the futures market and sell it in the spot market at the same time.

When selling the hedge, when the basis is strong, there will be net income; On the contrary, if the basis becomes weak, it will lose money. Market: When the commodity price rises, the recent contract price rises more, and when the commodity price falls, the forward contract price falls more. Reverse market: when the commodity price rises, the forward contract price rises more, and when the commodity price falls, the recent contract price falls more. When the market price is bullish, buy recent contracts, sell forward contracts, and take advantage of the changes in relevant price relationships in different months to make profits. In the cattle trading of agricultural products, traders buy short-term contracts and sell long-term contracts at the same time, hoping that the price increase of short-term contracts will exceed that of long-term contracts. In the bull market spread trading of financial futures, traders buy short-term financial futures and short-term forward financial futures.

I hope that in the market, recent financial futures will rise more violently than forward financial futures, and when the market is bearish, recent financial futures will fall less than forward financial futures. Bull market spreads are mainly used for arbitrage transactions when the market situation rises. In a positive market, if the supply is insufficient and the demand is relatively strong, the price of the recent contract will rise more than that of the forward contract, or the price of the recent contract will fall less than that of the forward contract. Traders can buy recent contracts and sell forward contracts and bull market spreads at the same time. The bull market spread in the reverse market is opposite to the bear market arbitrage in the reverse market. It can be applied to storable commodities in beef powder, including soybeans and their products, sugar, orange juice, plywood, wood, pork tripe and copper, including grains such as wheat.