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Cash-and-Carry Trade
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Cash-and-Carry Trade
An arbitrage-type position-typically consisting of a
long position
in an
underlying
and a
short position
in a
futures contract
-whose
risk
offsetting features transform the net position into the equivalent of a short-term money
market
instrument maturing at the expiration of the futures contract. Also called
Buying the Basis
. See also
Cash Enhancement Strategy
,
Index Arbitrage
. See
Basis Trade
(3).
Glossary
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