3 thoughts on “Why does arbitrage cause the price of different markets, or in other words, will eliminate profit opportunities?”
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Because short -term arbitrage opportunities will be continuously symmetrical and transparent by the information, it will lead to the price convergence of different markets. So as to eliminate profit opportunities. Long -term arbitrage opportunities often exist because each person's perspective is different, so it often exists.
This expansion information: 1. What is arbitrage
Biton: Refers to buying and selling two different types of futures contracts at the same time. The traders buy their own considers a cheap contract. At the same time, those high -priced contracts are sold to profit from the change relationship between the two contract prices. When arbitrage, traders pay attention to the mutual price relationship between contracts, not the absolute price level.
. Types of arbitrage
The arbitrage can be divided into three categories: cross -date arbitrage, cross -market arbitrage and cross -product arbitrage. Cross -term arbitrage is the most common in arbitrage transaction. It is used to make a profit when the normal price gap between the same product but the normal price gap between the same commodity but the different habitat month can be divided into bull spream and the bear market arbitrage. (Bear spread two forms.
. The method of arbitrage
1. Floating profit and positioning method in futures transactions, because traders have not sold the goods or index targets they hold, so this is this It can not only generate huge profits, but also bring huge losses. At this time, it is necessary to flexibly use the strategy of floating profits and positions. Specifically, when the trader holds a variety of warehouse orders, the book has floating profits, and the market confirms confirmation of the market. When the trader's judgment on the trend is correct, he can boldly use the floating profit and position strategy to make full use of the opportunities provided by the market. In this year's palm oil, soybean oil, and vegetable oil, there is such an opportunity. If investors decide to use the floating profit and position strategy, they must have a certain understanding of the rules of the variety they operate. R n2. High -throw low -suction method High throwing and low suction refers to the short or more near the pressure of the market to be short or falling near the support position. This approach is suitable for oscillation. Traders who have a strong and capable ability. When the trader enters the venue, although the futures market basically develops in the direction he is expected, at some point, the price has not changed significantly, and its fundamentals are not abnormal. The price difference suddenly increased or reduced according to the direction of traders expected. At this time, the positions could be decisively reduced (this situation often occurred). When this happened, the price spread usually returned to the normal range in a short period of time. When the price difference returns, it will make up the return in time in time, and it will complete a high -throw and low -suction operation, making full use of market opportunities. For example, in the positive arbitrage scheme of palm oil 2101 contract and 2105 contract, shortly ago, the short ago was short. During the time, the contract price spread to more than 430 yuan/ton, and soon returned to about 330 yuan/ton. If it was taken to reduce positions at about 430 yuan/ton, then the price difference between the palm oil 2101 contract and the 2105 contract returned to 330 yuan// At about the tons, replenish the position and complete a successful high -throw and low suction operation. However, when traders perform high -throw and low -suction operation, pay attention to the pressure effect of the upper track indicator of the Bollinger and the Bollinger Line. At the same time, the supporting role of the rail under the indicator should be determined before operation, and then the changes in the market's general direction should be determined, and then the operation of high open air positions should be performed, and the operation of low positions and open positions should be performed. The market exists at any time, and the profit is also at any time. The futures can be sold with them, and can be operated in both directions, which brings a lot of profit opportunities to traders.
3. When the floating profit appears alone, although the arbitrage operation of the investor is correct, the price trend of the variety of transactions is very obvious. In contrast The probability of transaction profit will be greater. In addition, considering that unilateral transactions are facing different risks, in order to gain more income, you can flatten a part of the sub -legs of the single -handed single, so that the position of the main leg is exposed part of it. This is a better choice. For example, this year's palm oil's positive cross -term arbitrage transaction, when the warehouse receipt of the trader is better, the price trend is obviously up. At this time Obtain more benefits in the rising market.
For example, the market price of A is low and the market price is high. A bought too much, the price is naturally up, B sells more, and the price is naturally going. Slowly converge.
Extension information:
For futures trading in the market, in previous articles, we once said a kind of instruction that it exists, namely arbitrage instructions, which also shows that it has arbitrage transactions. Therefore, in this article, we will mainly talk about what kind of existence of futures arbitrage opportunities, how to judge arbitrage opportunities, why arbitrage opportunities exist, what are the reasons, etc.
In the next content, the above questions will try to summarize and analyze it. I hope it can help you.
The futures have arbitrage trading behavior. The explanation of its arbitrage opportunities is that the future income of investors can make the investment with zero but securities portfolio is not a negative value. It happened in the absence of risk and capital.
. When the market price is lost balanced, it can also be said that the same assets have different opportunities when the two market prices are different, but this opportunity can not be easily discovered. Otherwise, there will not be so many people in the market are still in a state of losing money
The transaction behavior of arbitrage in the market. The short -term capital interest rate has become more consistent, and the difference between the recent and long -term exchange rates of the currency is reduced. There are two main forms of arbitrage in the market, which are not throwing and replenishing arbitrage. The difference between the two is that the former refers to the use of the interest rates of the two countries' capital markets. Market launch to obtain spread benefits; the latter refers to the short -term funds from the place A to the Bye Byland, while using the risk of changes in exchange rate changes with long -term foreign exchange transactions.
The opportunities for arbitrage in the stock market, the price of an investor at a stock on a Paris Stock Exchange is $ 50, but the price of this stock in the London market is indeed $ 51. This is an opportunity for arbitrage, and investors will buy a batch of that stock on the Paris Stock Exchange, and then sell the same amount of the stock on the London Stock Exchange at the same time. It is said that it is a risk -free profit. If there is a transaction cost in this process, the difference in the difference in the difference needs to minus this cost is the real harvest profit.
It how to determine whether there is opportunities for arbitrage in the market:
1. Generally, this kind of asset has different prices and interest rates in two different markets, which is one of them, which is one, which is one, which is one, which is one. Opportunities for arbitrage, but at this time, we must also pay attention to the cost of transaction in this process than its income, then this is not a arbitrage opportunity.
2. Generally speaking, the transaction cost is a values that can affect our arbitrage strategy.
3. On the market, the smaller the transaction cost will make the arbitrage profit more profitable when arbitrage opportunities occur.
The main reasons for this opportunity. Please see the following: 1. Generally speaking, investors in arbitrage trading in the market generally think that this is a low -risk transaction behavior. ; 2. It can enable investors to avoid those unexpected factors, or losses due to price fluctuations, but we must also understand that risks and benefits are directly proportional to at any time, so its income is generally smaller. But the large arbitrage activities in the market will also cause fluctuations. 3. The generation of arbitrage opportunities allows investors to conduct arbitrage transactions to balance the level of the market to return to normal, and to a certain extent, it will also improve the liquidity of the market.
For example, the market price of A is low and the market price is high. A bought too much, the price is naturally up, B sells more, and the price is naturally going. Slowly converge.