What is Arbitrage fund ?
Hello friends one more topic to understand Arbitrage funds now lets understand What Is Arbitrage? All You Need To Know About Arbitrage Funds Arbitrage involves the simultaneous purchase and sale transactions of an asset in two different markets (i.e., cash and futures markets) to profit from inefficiencies in the prices across these markets. And the funds that work on this principle are called Arbitrage Funds. Although the mechanism may sound complex to a layman, it’s pretty straightforward once you understand the cash market and futures market. Let’s first understand the two markets a bit better. Cash market Also known as the spot market, this is the market where transactions are settled on the spot. For instance, think of the secondary equity markets. When you buy shares on the NSE, your account is debited with the funds, and your transaction is settled on the spot. Futures Market A futures market, as the name suggests, is a market where you can buy the right to buy or sell an