2. The principle of equal buying and selling: When a certain number of buying positions are established, the same number of selling positions should be established, otherwise the mismatch of long and short positions will expose the positions (that is, the phenomenon of net long positions or short positions) and face greater risks.
3. Principle of opening positions at the same time: Generally speaking, bulls and bears should open positions at the same time. In view of the fluctuation of futures prices, trading opportunities are fleeting. If you can't open a position at the same time at a certain moment, the spread may become unfavorable to arbitrage, thus losing the arbitrage opportunity.
4. Principle of simultaneous hedging: When the arbitrage position reaches an expected profit target after a period of fluctuation, it is necessary to settle the profit through hedging, and at the same time, it is also necessary to hedge. Because if hedging is not timely, it is likely to make long-term spread profits disappear instantly.
5. Contract correlation principle: Arbitrage is generally conducted between two contracts with strong correlation, and not all varieties (or contracts) can be arbitraged.
This is because, only when there is a strong correlation between contracts, the spread will return, that is, the spread will expand (or shrink) to a certain extent, and it will return to the original equilibrium level, so that arbitrage will have a foundation. Otherwise, arbitrage on two unrelated contracts is tantamount to one-way speculation on two different contracts.
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