List of Arbitrage Articles

Cash and carry arbitrage is a financial arbitrage strategy that involves making the best of the anomalies in pricing, or mispricing as it is called.

Arbitrage strategies are risk-free strategies to capitalize on price discrepancies. Here we look at different types of arbitrage trading strategies and the types of arbitrage strategies.

Cash futures is quite simple. Reliance is trading at Rs.2100 in the cash market and at Rs.2118 in the 1-month futures. You buy Reliance in cash equivalent to the lot size and sell one lot of Reliance futures.

Reverse cash and carry arbitrage happens when the futures is at a discount to the spot price and is attractive even after you consider the cost of carry.

Arbitrage is about capitalizing on price differentials between markets while hedging is about reducing risk through offsetting positions.

Cash futures is quite simple. Reliance is trading at Rs.2100 in the cash market and at Rs.2118 in the 1-month futures. You buy Reliance in cash equivalent to the lot size and sell one lot of Reliance futures.

Reverse cash and carry arbitrage happens when the futures is at a discount to the spot price and is attractive even after you consider the cost of carry.

Arbitrage is about capitalizing on price differentials between markets while hedging is about reducing risk through offsetting positions.

Terms like arbitrage and speculation are common place words in the market trading lexicon. As a trader in markets, it is essential to understand the arbitrage and speculation difference.