It can also be two interrelated different commodities. It can also be the same commodity in different futures markets. Arbitrage traders long on one futures contract and short on another futures contract, and profit from the price difference between the two contracts has little to do with the absolute price level.
Arbitrage trading has the following characteristics compared with ordinary speculative trading:
1, low risk. The spread of different futures contracts is far less severe than the absolute price level, which correspondingly reduces the risk, especially avoids the risk of unexpected events hitting the disk.
2. Facilitate the entry and exit of large funds. Arbitrage can attract a lot of money. Due to bilateral positions, it is difficult for the main institutions to force arbitrage traders to reduce their positions.
Extended data:
Main arbitrage modes:
Arbitrage trading modes are mainly divided into four types, namely: stock index futures arbitrage, commodity futures arbitrage, statistics and option arbitrage.
1, stock index futures arbitrage
Arbitrage of stock index futures refers to the behavior of taking advantage of the unreasonable price of stock index futures market, participating in the trading of stock index futures and stock spot market at the same time, or trading stock index contracts with different maturities and different (but similar) categories at the same time to earn the difference. Stock index futures arbitrage is divided into futures arbitrage, intertemporal arbitrage, cross-market arbitrage and cross-variety arbitrage.
2. Commodity futures arbitrage
Similar to the hedging of stock index futures, commodity futures also have arbitrage strategies. When buying or selling a futures contract, they sell or buy another related contract and close both contracts at a certain time.
It is similar to hedging in transaction form, but hedging is to buy (or sell) physical objects in the spot market and sell (or buy) futures contracts in the futures market; Arbitrage only buys and sells contracts in the futures market, and does not involve spot trading. ?
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