In general, the exploitation of different prices in the simultaneous purchase (sale) of financial instruments or commodities – on the same exchange (intra-market transactions) or on different markets or exchanges and currency areas (inter-market transactions), – in different contract months, – between cash and futures markets or – of different but related commodities (in general: the strategy that involves the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more markets in order to benefit from a divergence in their price relationship). Arbitrageurs thus achieve the equalization of the terms of contracts (by actions of arbitrageurs, contract differences are eliminated). – Arbitrage transactions in the narrower sense are risk-free, since buying (on the cheaper market) and selling (on the more expensive market) are carried out simultaneously. – Arbitrage transactions in the broader sense are different. Here, one tries to exploit deviations from the price development observed in the past of similar or closely interrelated goods or financial instruments. – See absorption phase, carry trades, day trading, high-frequency trading, index arbitrage, intermarket spread, positions, synthetic, price difference trading, option, commodity futures contract, value fund.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/