Arbitrage):
In finance, it is defined as the act of buying or selling the same or basically the same securities at favorable prices in two different markets. The financial instruments in the portfolio can be the same or different.
In market practice, the word "arbitrage" has a different meaning from the definition. In practice, arbitrage means high-risk positions, which may bring losses, but are more likely to bring benefits.
Arbitrage is also called spread trading. Arbitrage refers to buying or selling an electronic trading contract while selling or buying another related contract. Arbitrage trading refers to trading in the opposite direction in related markets or related electronic contracts by taking advantage of the price difference changes between related markets or related electronic contracts, and making profits in the expectation of price difference changes.
Arbitrage, also known as arbitrage, usually refers to buying a physical asset or financial asset at a lower price and selling it at a higher price when there are two prices (in the same market or in different markets), thus obtaining risk-free income. Arbitrage refers to the act of making profits by correcting the abnormal situation of market price or yield. Abnormal situation usually refers to the behavior that the price of the same product is significantly different in different markets, that is, arbitrage means buying low and selling high, which leads to the price returning to equilibrium level. Arbitrage usually involves establishing a position in one market or financial instrument and then establishing a position in another market or financial instrument to offset the previous position. After the price returns to the equilibrium level, you can close your position and take profit. Arbitrator refers to an individual or institution engaged in arbitrage.
Trying to profit from the price difference of the same or similar financial products in different markets or in different forms. Traders buy contracts that they think are "cheap" and sell those "high-priced" contracts at the same time, benefiting from the changing relationship between the prices of the two contracts. In arbitrage, traders are concerned about the mutual price relationship between contracts, not the absolute price level. The ideal state is risk-free arbitrage.
Arbitrage used to be a trading technique used by some alert traders, but now it has developed into a technique to profit from the small price difference of the same securities in different markets with the help of complex computer programs.
This information does not constitute any investment advice. Investors should not use this information to replace their independent judgment or make decisions only based on this information. If they operate by themselves, please pay attention to position control and risk control.