Reverse Cash and Carry Arbitrage

  • Thread starter Thread starter NES
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NES

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11/25/18
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Hello all, I'm new to the forum and have been learning about financial engineering on my own for a while (it could be called "career development", or just messing around with new things). I've done quite a bit with computational finance in my work, but some of this is new territory for me! My friend who's been helping me learn gave me a few problems, one has me pretty much stumped. He asked how you'd (hypothetically) carry out reverse cash and carry arbitrage with crude oil. My understanding is that you'd have to short spot crude oil, but how could you actually carry this out? I've tried several things, but haven't gotten anywhere with it. Am I missing something obvious? It seems easy enough with bonds or a stock index, but what about a physical commodity like crude oil?

Thanks.
 
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