What trading opportunity arises when the Crude Oil and Crude Oil Mini contracts trade at different prices? Option: Arbitrage, Speculation, Hedging, Futures trading

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What trading opportunity arises when the Crude Oil and Crude Oil Mini contracts trade at different prices?

Arbitrage

Speculation

Hedging

Futures trading

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What is essential to ensure when executing an arbitrage trade to maximize profit potential?

Trade during volatile market conditions

Wait for a significant price difference between the contracts

Trade similar contract values for both Crude Oil and Crude Oil Mini

Trade during off-peak hours

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What is the key principle to follow when executing an arbitrage trade between Crude Oil and Crude Oil Mini contracts?

Buy the cheaper contract and sell the more expensive one

Sell both contracts simultaneously

Buy both contracts simultaneously

Buy the contract with the higher price and sell the one with the lower price

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What is the name of the trading strategy that involves buying an asset in the spot market and simultaneously selling it in the futures market?

Quantitative Trading

Cash and Carry Arbitrage

Index Arbitrage

Calendar Spread

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What is the name of the trading strategy that involves profiting from the price difference between two futures contracts with different expiration dates?

Calendar Spread

Spot-Futures Spread

Contango

Futures Arbitrage

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What is the fundamental principle behind arbitrage opportunities in financial markets?

Exploiting differences in investor sentiment

Predicting future market movements

Leveraging high-frequency trading strategies

Capitalizing on price discrepancies between related assets