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Study on future-spot arbitrage strategies in China's treasury bond ETF and treasury bond futures based on high-frequency data

  • Si Lu Wang*
  • , Wen Jun Sun
  • *Corresponding author for this work
  • School of Management, Harbin Institute of Technology

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Arbitrage strategy is one of the basic trading strategies in the Treasury bond futures market. It makes futures price reflect the trend of spot market more reasonably. It can also help to increase flexibility of China's Treasury bond market. Still in the early stage, the Chinese Treasury bond futures market provides apparent arbitrage opportunities. However, in practical operation of basis arbitrage trading of Treasury bond futures, transactions in the Treasury bond spot market are not as frequent as expected, making it difficult to take actions when arbitrage opportunities arise. To solve this problem, instead of using Treasury bond spot, we use Treasury bond ETF (Exchange-Traded Fund) in our Treasury bond future-spot arbitrage strategy research. Our study illustrates the forward basis arbitrage opportunities on the basis of price trends and spreads expansion.

Original languageEnglish
Title of host publicationInternational Conference on Management Science and Engineering - Annual Conference Proceedings
EditorsHua Lan, Yu-Hong Yang
PublisherIEEE Computer Society
Pages1251-1257
Number of pages7
ISBN (Electronic)9781479953752
DOIs
StatePublished - 17 Oct 2014
Externally publishedYes
Event21th Annual International Conference on Management Science and Engineering, ICMSE 2014 - Helsinki, Finland
Duration: 17 Aug 201419 Aug 2014

Publication series

NameInternational Conference on Management Science and Engineering - Annual Conference Proceedings
ISSN (Print)2155-1847

Conference

Conference21th Annual International Conference on Management Science and Engineering, ICMSE 2014
Country/TerritoryFinland
CityHelsinki
Period17/08/1419/08/14

Keywords

  • arbitrage
  • basis
  • price
  • treasury bond ETF
  • treasury bond futures

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