| This essay is based on my long time research and practice on agriculture products futures investment and the edible oil products sales experience, along with learning on MBA course, gives the analysis and summary to beans futures arbitrage strategy. Hence, it can give oil enterprise some guidance on futures trading, reduce the firm's operational risks, increase rewards to investment.In recent years, futures business market develops rapidly. Trading volume is increased as well. Global economic crisis leaded the big price fluctuation of manufacturing enterprises. It pushes more enterprises and individual investors to enter futures trade market. Oil companies are engaged in oil plants like soy beans manufacturing and sales. Commodities Exchange provides a series of beans products contracts, aiding oil companies to invest via futures trade and avoid risks. But currently, oil companies have understanding and operational skills lacks on futures trading investment method and operational models. Therefore it's necessary to find the low risky and stable rewarding strategies, to effectively increase oil company's investment rewards.Arbitrage is a hedging investment strategy, a way of avoiding risks in futures trade market. Arbitrage in futures is a low risky comparing with unilateral trade and stable profit method. It takes different trading objects and trading strategy rather than unilateral trade basing on prices. Because you hold two different trading positions, same quantified contracts supply, you partially offset the unsure factor which causes price change. Arbitrage represents low fluctuation property. |
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