Cash-And-Carry Trade
A trading strategy that involves the simultaneous trading of two similar securities in order to recognize an arbitrage profit. Also known as "basis trading" or "buying the basis." Investopedia Says:
In a cash & carry trade, the first trade involves the purchase of a particular type of security, (usually a stock, index, or commodity), and the second involves a short trade in the asset underlying the security, (usually a futures contract). Related Terms:
Arbitrage
Arbitrage-Free Valuation
Cost of Carry
Futures
Pairing Off
Pairs Trade |