What is no-arbitrage band?No-Arbitrage Band
The price range set by trading costs: when a mispricing stays inside it, arbitrage isn't profitable after costs.
Learn “no-arbitrage band” in an animated lesson
- Arbitrage StrategiesThe Costs and Risks of Arbitrage
Risk-free on paper isn't risk-free in practice. Trading costs, funding pressure and execution delays can all spoil an arbitrage.
- Arbitrage StrategiesCalendar Spread Arbitrage: Near vs. Far Months
For the same gold, how far apart should near-month and far-month futures be? The gap is 6 months of interest and storage. If the far month is too expensive, buy near, sell far, and take delivery.
- Arbitrage StrategiesWhat Is Arbitrage?
The same bar of gold is priced differently in two markets. Buy on one side, sell on the other, and pocket the difference, until arbitrageurs close the gap.
Related terms
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Go to “The Costs and Risks of Arbitrage”