Cash-And-Carry Trade

Dictionary Says

Definition of '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."
Investopedia Says

Investopedia 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).

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Arbitrage

    The simultaneous ...
  2. Cost Of Carry

    Costs incurred ...
  3. Futures

    A financial ...
  4. Pairing Off

    An illegal ...
  5. Pairs Trade

    The strategy of ...
  6. Arbitrage-Free Valuation

    1. The ...
  7. Reverse Cash-and-Carry-Arbitrage

    A combination of ...
  8. Risk Capital

    Investment funds ...
  9. Futures Contract

    A contractual ...
  10. Hong Kong Stock Exchange (HKG) .HK

    One of the ...

Articles Of Interest

  1. The Secret To Finding Profit In Pairs Trading

    Read about a market-neutral trading strategy using relatively low-risk positions.
  2. Trading The Odds With Arbitrage

    Profiting from arbitrage is not only for market makers - retail traders can find opportunity in risk arbitrage.
  3. Derivatives 101

    Learn how to use this type of investment as an alternative way to participate in the market.
  4. Risk Tolerance Only Tells Half The Story

    Just because you're willing to accept a risk, doesn't mean you always should.
  5. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.
  6. Simplify Your Portfolio

    Faced with an overabundance of choices, many investors forget to stick to the basics.
  7. Hedging With ETFs: A Cost-Effective Alternative

    The benefits of ETFs for hedging are clear and investors of all sizes are taking notice.
  8. Minis Provide Low-Cost Entry To Futures Market

    These contracts provide access to commodities without a huge capital commitment.
  9. Forget The Stop, You've Got Options

    Using options instead of stop-loss orders adds finesse and control in limiting losses.
  10. Offset Risk With Options, Futures And Hedge Funds

    Though all portfolios contain some risk, there are ways to lower it. Find out how.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center