Index Arbitrage

What is Index Arbitrage?

Index Arbitrage meaning 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.

 

reference: U.S. COMMODITY FUTURES TRADING COMMISSION – CFTC Glossary