How to place an order for futures arbitrage?
Futures arbitrage refers to arbitrage by using the fluctuation of price difference between related futures contracts. After using historical data and actual storage fees, transportation fees, processing fees, etc. to determine a reasonable price difference. When the price difference between related futures contracts deviates from a reasonable range, arbitrage can be carried out in this way:
1 When the price difference is too large, you can buy low-priced contracts and sell high-priced contracts at the same time. Once the spread narrows, you can make a profit.
When the spread is too small, you can sell low-priced contracts and buy high-priced contracts. Once the price difference becomes larger, you can make a profit.
The above is the general method. Specifically, futures arbitrage can be divided into three types, namely intertemporal arbitrage, cross-market arbitrage and cross-variety arbitrage: intertemporal arbitrage refers to arbitrage with two futures contracts with the same subject matter but different months; Cross-market arbitrage is arbitrage in different markets with the same futures contract; Cross-variety arbitrage refers to arbitrage by using the futures price difference between two different but interrelated commodities.