Arbitrage Funds are Hybrid Mutual Funds that seek to exploit arbitrage opportunities for the same underlying asset in different capital markets. Arbitrage refers to taking advantage of price differentials of the same asset, such as in the spot and futures markets.
A spot market is a place where buyers and sellers agree to a price for an asset and exchange the asset for cash at that moment. In contrast, in a futures market, buyers and sellers agree to a price for an asset at a future date. This means that they are entering into a contract to buy or sell the asset at a specified price on a specific date in the future.
Spot prices are determined by supply and demand in the present moment. In a futures market, the price of
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