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Arbitrage |
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An investment strategy that attempts to profit from the differences
between actual and theoretical futures prices of the same stock index.
This is done by simultaneously buying (or selling) a stock index future
while selling (or buying) the stocks in that index.
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This
is done with program trading. Using software that monitors both a
stock index and futures contracts on the index, traders can be notified
when there is a larger than normal gap. |
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