Arbitrage refers to the trading strategy of obtaining profits through buying and selling in different markets, different exchanges or different varieties.

Usually, arbitrage trading takes advantage of the price difference or lack of trading between markets to obtain risk-free profits by conducting opposite trading operations in two or more markets at the same time.

For example, suppose that the price of a commodity in A market is 100 yuan, and the price of the same commodity in B market is 90 yuan, then the arbitrageur can buy the commodity in B market and then sell it in A market, thus obtaining the profit of 10 yuan. At this point, because the buying and selling operations are carried out at the same time, the arbitrageur does not need to bear any risks, even if the price fluctuates, it will not affect his profits.

Here are several arbitrage methods.

Intertemporal arbitrage: usually carried out between futures of the same futures product with different maturities.

Cross-market arbitrage: arbitrage between different exchanges, where the price difference of the same asset exists in different markets.

Cross-commodity arbitrage: trading by using the price difference between two different but related commodities.

It should be noted that arbitrage trading needs fast response speed and strong computing power, because the price difference is small and there is a moment. At the same time, arbitrage trading also needs to bear certain risks, because the price may change during your trading time, resulting in the failure to obtain the expected profit.