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Reverse cash and carry trade
A type of basis trade where the arbitrageur takes a long forward position on a financial instrument or commodity, generally by purchasing a futures contract, and simultaneously sells the same instrument or commodity in a spot transaction.
This type of arbitrage is used when the derivative is underpriced relative to the price of the underlying on the spot market.
Translations
Synonyms and variations
- Reverse cash and carry
- Reverse cash and carry arbitrage