managed futures - conduct arbitrage when relationships are out of equilibrium

…it says int the book that "institutional characteristics and differential carrying costs among investors may permit managed fund traders totake advantage of short-term pricing differences between theoretically identical stock, bond, etc. positions. (p.96)

what do they mean with “differential carrying costs”

depending on the size of the trader - they are able to negotiate better deals for themselves in terms of the “terms of the contracts” and thus can have different costs for the same instrument.

A bigger trader - can negotiate better and have a lower cost.