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."

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).


Investment dictionary. . 2012.

Look at other dictionaries:

  • cash and carry trade — See basis trading LIFFE * * *    An arbitrage position that typically comprises a long cash position together with a short position in its respective futures contract. The trader buys the cash (or physical) commodity, such as coffee, and at the… …   Financial and business terms

  • Reverse Cash and Carry Trade —    ► See Cash and Carry Trade …   Financial and business terms

  • Cash and carry (wholesale) — Cash and carry wholesale represents a type of operation within the wholesale sector. Its main features are summarized best by the following definitions:*Cash and carry is a form of trade in which goods are sold from a wholesale warehouse operated …   Wikipedia

  • cash-and-carry arbitrage — ( carry arbitrage) A basis trade involving a long cash position exactly offset by a short futures position. The holder of the position believes that the futures contract is expensive. He shorts the future, borrows at money market rates to finance …   Financial and business terms

  • cash and carry —    The changes in contemporary shopping, particularly for food, are not purely a matter of shifts from small retail units to supermarkets. The retail customer may select one of the major bulk buying outlets for cheap products, and most of the… …   Encyclopedia of contemporary British culture

  • cash and carry arbitrage — An arbitrage trade entered into where a futures contract is sold and the underlying asset is purchased in the cash market. Such a trade will be effected where the trader believes that the futures is trading relatively expensive to its fair value …   Financial and business terms

  • Metro Cash and Carry — METRO Cash Carry Type Private Industry Wholesale Founded 1964 …   Wikipedia

  • reverse cash and carry arbitrage — An arbitrage trade entered into where a futures contract is purchased and the underlying asset is sold in the cash market. Such a trade will be effected where the trader believes that the futures is trading relatively cheaply to its fair value.… …   Financial and business terms

  • carry — 1 verb carried, carrying 1 LIFT AND TAKE (T) to take something somewhere in your hands or arms, on your back etc: A porter helped me carry my luggage. | Let me carry that for you. | carry sth around/out/to etc: I m not carrying it around all day! …   Longman dictionary of contemporary English

  • cash market — A place where people buy and sell the actual commodities, i.e., grain elevator, bank, etc. Spot usually refers to a cash market price for a physical commodity that is available for immediate delivery. A forward contract is a cash contract in… …   Financial and business terms

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