PS: Basic Forms and Case Analysis of Arbitrage
(1) Period arbitrage: Period arbitrage refers to an operation mode in which the same member or investor establishes the same number of trading positions with opposite directions in different contract months of the same futures product for the purpose of earning the difference, and ends the trading by hedging or delivery.
Intertemporal arbitrage is one of the most commonly used hedging profit transactions, which is divided into bull spread, bear market arbitrage and butterfly arbitrage in practice.
(2) Cross-market arbitrage: including arbitrage of the same commodity in different markets at home and abroad, spot market arbitrage, etc. ;
(3) Cross-commodity arbitrage: Arbitrage activities are mainly carried out by using the strength contrast differences between commodities with high correlation (such as substitutes, raw materials and downstream products).
2. There are many kinds of hedging, which is intended to be a two-way operation. Economic hedging is to achieve the purpose of hedging. Hedging in import and export trade means that importers and exporters buy foreign currency in the foreign exchange market in order to avoid direct or indirect economic losses caused by foreign currency appreciation, and the purchase amount is equivalent to the foreign currency they need to pay for imported goods; Hedging in futures refers to the behavior that customers buy (sell) a futures contract and then sell (buy) a futures contract with the same amount as the original variety in the delivery month to offset the delivery spot. Its main point is that the months are the same, the directions are opposite, and the amount is the same.
3. Capital structure refers to the source composition and proportional relationship of various funds of an enterprise. In a broad sense, capital structure refers to the composition and proportion of all funds of an enterprise, including not only sovereign capital, long-term debt funds, but also short-term debt funds. The narrow sense of capital structure only refers to the source composition and proportion of sovereign capital and long-term debt funds, excluding short-term debt funds. The optimal capital structure refers to the capital structure when the weighted average capital cost is the lowest and the enterprise value is the highest in a certain period. Its standard is: (1) it is beneficial to maximize the owner's wealth and enterprise value. (2) The weighted average cost of capital of enterprises is the lowest. (3) Maintain proper liquidity of assets and make the capital structure flexible. Among them, the lowest weighted average cost of capital is its main criterion. Enterprises that meet one of the following conditions can adjust their existing capital structure according to the target capital structure: (1) When the existing capital structure is flexible; (2) When increasing investment or decreasing investment; (3) When the enterprise gains more profits; (4) When the debt is readjusted. The methods of capital structure adjustment are: (1) stock adjustment. That is, on the basis of not changing the scale of existing assets, according to the requirements of the target capital structure, make necessary adjustments to the existing capital structure. (2) Incremental adjustment. That is, adjust the capital structure by increasing the amount of additional funds and total assets. (3) reduction adjustment. That is, adjust the capital structure by reducing total assets.