Index Arbitrage

This Issue in United States

Concept of Index Arbitrage in Futures Trading

In this context of financial law, the following is a definition of Index Arbitrage: The simultaneous purchase (sale) of stock index futures and the sale (purchase) of some or all of the component stocks that make up the particular stock index to profit from sufficiently large intermarket spreads between the futures contract and the index itself. Also see Arbitrage, Program Trading.