1. Arbitrage transaction: Arbitrage transaction, also known as hedging profit, refers to a foreign exchange transaction that uses the short-term interest rate difference of different countries or regions to transfer funds from countries or regions with lower interest rates to countries or regions with higher interest rates, so as to obtain spread income from them. Futures market arbitrage refers to buying and selling two different futures contracts at the same time.

2. The main methods of arbitrage trading:

First, intertemporal arbitrage

Intertemporal arbitrage is an arbitrage mode in which futures contracts of the same commodity with different maturities are bought and sold in the same market, and the price difference of contracts with different maturities is used to make profits. The picture on the right shows the arbitrage trade between soybean and natural rubber varieties.

B. Cross-variety arbitrage

Cross-variety arbitrage is to hedge profits by using price changes between two different but interrelated commodities. That is, buy a commodity futures contract in a certain month and sell another interrelated commodity futures contract in a similar delivery month. Mainly (1): arbitrage between related commodities. (such as the arbitrage of copper and aluminum. (2): Arbitrage between raw materials and finished products (such as arbitrage between soybeans and soybean meal). )

C, cross-market arbitrage

Cross-market arbitrage refers to buying (selling) a commodity futures contract in one futures market and selling (buying) the same contract in another market in order to hedge profits at a favorable opportunity.

Arbitrage trading is divided into physical arbitrage and virtual arbitrage according to whether or not to hand over the physical object. Arbitrage generally tries not to take a firm offer, and makes a profit by changing the price difference of different contracts. With the rich experience of actual trading and the intervention of large funds, many enterprises began to combine futures and spot, further develop hedging theory, and raise the goal of hedging to value-added with a more positive attitude. This kind of corporate arbitrage has attracted more and more attention from investors.