I was thinking the kind of arbitrage where people are offering a futures contract at a different price than the current price of the good (modulo the risk-free rate, storage costs and consumption of the good). Then they will be arbitraged and lose money for no good reason.
Investors know not to do this, but it’s rarely immediately obvious to people who start learning how to invest.
Can you provide a stronger case for this?
I was thinking the kind of arbitrage where people are offering a futures contract at a different price than the current price of the good (modulo the risk-free rate, storage costs and consumption of the good). Then they will be arbitraged and lose money for no good reason.
Investors know not to do this, but it’s rarely immediately obvious to people who start learning how to invest.