Offer your thoughts or opinion on the input financial query or topic using your financial background.

What is the principle of forming an arbitrage strategy?
Well, arbitrage is a simple mean reversion strategy which states that any two similar commodity with some price difference (usually not much)  will converge. So either you can bet on difference in prices in different exchanges or also you can bet on difference in futures value.  For example if current price of stock is 14$ and if futures price is 10$.  Then you can buy one futures contract and short one stock at the market price. This would lock in a profit of 4$ per share.