01 Jan 2001, Energy Risk glossary , Energy Risk
A strategy whereby a trader generates a riskless profit by selling a futures contract and buying the underlying to deliver into it. The futures contract must be theoretically expensive relative to the underlying. If the futures are theoretically cheap compared to cash, the trader could sell the underlying and buy the futures – in reverse cash-and-carry arbitrage.
© Incisive Media Investments Limited 2014, Published by Incisive Financial Publishing Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, are companies registered in England and Wales with company registration numbers 04252091 & 04252093