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Arbitrage
Hi,I'm from India.I've recently begun trading in Futures and Options. Recently I sold 100 shares of a company at 2038.(I had inventory)I also bought its futures which traded at a discount at 1998.I can understand the arbitrage gain, theoretically. At the expiry, the future will allow me to buyback the stock at 1998,realising 40 Rs/share(cash inflow of 2038, outflow of 1998).The market that I operate in has futures cash settled daily not stock settled.(MTM). Does anyone know, In such a market, how does the arbitrage profit materialise in terms of cash flows.-STJ