If you are new to the stock market, as a stock market novice, you need to master some professional knowledge. So, what is arbitrage? What are the types of arbitrage?

Arbitrage is divided into risk-free arbitrage and low-risk arbitrage. Risk-free arbitrage involves relatively complex mathematical models and is beyond the scope of this discussion. There are many low-risk arbitrage situations in daily transactions and their use value is relatively high. Arbitrage is divided into technical arbitrage and theme-based arbitrage. What we are talking about here is theme-based arbitrage.

Three types of theme arbitrage

1. Compensatory arbitrage

When the theme of a stock is representative and the range increase is very exaggerated, Stocks with the same theme, the same sector, and relatively stagnant stocks have relatively large room for compensatory growth and relatively small retracement risks, and are suitable for heavy buying.

2. Diffusion Arbitrage

When a subject breaks out on a large scale, market hype will be malleable and diffusive, and the scope of speculation will expand to the upstream and downstream of the subject. Although the intensity of diffusion of alternatives is mostly not as strong as this theme, funds that can lurk first can often obtain good short-term returns and very low risks.

3. Internal and external market arbitrage

Since the start of the domestic growth stock feast in 2013, the speculation of high growth in the A-share market has always followed the trend of the same concept in U.S. stocks, such as mobile games, lottery, The same is true for film, television, biology and other themes. Therefore, growth stocks in China and the United States have relatively strong linkage.

Key points of theme-based arbitrage:

1. Because there is usually more than one stock that makes up for the increase, you must choose the strongest, clean and moderately sized stock that attracts the most attention from hot money. , if you make the wrong choice, your income will be greatly reduced. It is best to intervene when the daily limit occurs or to intervene the next day. It is not a good idea to lurk in advance.

2. The increase in the diffusion sector will not exceed the increase in the leading sector, so the expected profit after buying is usually 30%-50% of the increase in the leading sector.

3. Due to the time difference between internal and external markets, the linkage has a lag, so the buying position and price are more important. When the market is poor, it often opens high and moves low.