cash & carry arbitrage

AMITAG1990
Finance Junkie
Posts: 89
Joined: Sat Sep 22, 2012 12:35 pm

cash & carry arbitrage

Postby AMITAG1990 » Mon Nov 05, 2012 6:34 pm

what is a mean of cash & carry arbitrage.. and inverse cash & carry arbritage.??

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content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: cash & carry arbitrage

Postby content.pristine » Wed Nov 07, 2012 7:22 pm

Cash and Carry Arbitrage is used when the Forward is Overpriced.
You would Borrow Money and Short the Forward.

Reverse Cash and Carry Arbitrage is used when Forward is Underpriced.
You would lend money and go long the forward contract.

8-)


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