Elimination of riskless profit opportunities in the futures market is

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Arbitrage is the process of taking advantage of price differences for the same asset in different markets, thereby eliminating riskless profit opportunities. In the futures market, arbitrageurs buy low-priced futures contracts in one market and simultaneously sell them at a higher price in another market to profit from the price difference. Hedging is the practice of using futures contracts to mitigate the risk of price fluctuations in an underlying asset. Speculation involves taking positions in the futures market with the hope of profiting from price movements. Underwriting refers to the process of guaranteeing financial support for a security or commodity issuance.

Elimination of Riskless Profit Opportunities in the Futures Market Is