[mkaymalright]

Spot-Futures arbitrage, especially if your brokers allows you to collateralize your futures position with the profits from your spot position which would allow for higher leverage on the futures side.

Let's say the futures price is higher than the spot price and there is 3 months left until maturity. You sell the same (USD equivalent) amount in the future (expensive) and buy in the spot (cheap). You just made a profit and no matter where the price goes - you're hedged. The only thing is that you're stuck with 2 positions now. Just wait 3 months until maturity and the futures and spot price will converge to the same price. Now buy in the futures and sell in the spot and you've done it!

Of course, while being pretty much risk free the upside is also limited to how much (percentually) the future is above/below the spot.

[solaxun]

And please tell me... how often is the cash and carry spread there enough to cover the typical margin fees charged to retail investors?

[chvid]

No.

Buy a house and some stocks in growth sectors.

[brobinson]

Being long-only is great when everything is going up.

As for me, I like to hedge out the market and sector movements by being long/short (adjusted for beta) within a given sector. I only make money if my long outperforms my short. Trump tweets and other companies' earnings in the sector do not affect my P/L.

[Der_Einzige]

No - You're wrong and the person you're replying to is right.

Futures are how you multiply your money with relatively low risk. Stocks are how you get 5% returns amortized YOY if you're lucky

[oh_sigh]

Why is there all this free money sitting in the futures market?

[saiya-jin]

Yeah I wonder why on earth is any professional trader doing anything else rather than methods described. Those amateurs, right? Money sitting there for free... give me a break.

I don't need to be a finance expert to know when somebody sells a snake oil - things that sound too good to be true most often are.

[brobinson]

Cost of carry.

[SketchySeaBeast]

So then would it help to scale it or not?