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Cash and Carry Trade

   Also found in: Wikipedia 0.03 sec.
Cash and Carry Trade
A trading strategy that involves the simultaneous trading of two similar securities in order to recognize an arbitrage profit. Also known as "basis trading" or "buying the basis."

Notes:
In a cash & carry trade, the first trade involves the purchase of a particular type of security, (usually a stock, index, or commodity), and the second involves a short trade in the asset underlying the security, (usually a futures contract).


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