What is 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.”” Read more for examples and further explanation including related video clips and also comments
Example explains Cash-And-Carry Trade
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).
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