This is somewhat non-technical question, but it seems like this forum is still the best place for it.

I'm reading Shleifer's Inefficient Markets, where he points out that

[...] for futures and options, close substitutes are usually available, although arbitrage may still require considerable trading

where substitutes refer to other assets that posses similar enough cash flow to justify arbitrage activity. Is there a reason that futures and options have more substitutes than say, equities or debt, for example?

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    $\begingroup$ For options there are many available strikes and maturities, and through dynamic hedging the underlying can (theoretically) serve as a substitute as well. For futures you can trade in the underlying commodity/index or in futures with different maturity dates. When trading WTI Crude, Brent Crude is a (imperfect) substitute, etc. An index of 500 stocks can be approximated with just 5 or 10, etc. (Which BTW shows these derivatives are not essential to the functioning of the economy). $\endgroup$ – noob2 Apr 6 at 10:26
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    $\begingroup$ Almost by definition derivatives lack originality or uniqueness since they are related to the price of something else which already trades. $\endgroup$ – noob2 Apr 6 at 12:43

There are some liquid futures contracts that closely mirror other futures contracts (eg, ICE Brent Crude and CME WTI - both are closely tied to the price of oil). Anyone can create an exchange and launch futures contracts. However, having alternatives is usually bad as it leads to fragmented (and therefore lower) liquidity, as the contracts are not fungible.

In general though, trading futures is pretty straight forward for most institutions and that means that most liquidity is usually concentrated on a single contract. Eg, the CME offers palmoil futures, but almost no-one trades them as most of that activity happens on the Malaysia exchange. Any arbitrage activity between the two would be prety fraught with liquidity risk (and cost) on the CME side.

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