About Spread and Arbitrage

Hi guys

I am currently learning the knowledge of oil trading, and may need some help.
I read from one book about the 'Carrying' switches, or carrying spread. It said this will happen if the price of a forward month is greater than the price of a nearer one plus the cost of keeping the product until the forward month.
However, if this is traded in future market, it does not need to be really 'physical' settled right, so why still need to consider about the physical storage?
It also said the deal is closed-out by taking delivery of the product off the market and putting it back in the further month, so in this way, the physical delivery must be processed? which is different with the common understanding of future market, which the physical delivery is few to happen.
So I got a bit confused here, hope someone can help me.

Also, I would like to ask the different of spread and arbitrage. They are basically both the simultaneous selling of the same or similar commodity in one market, and purchase in other, so what is the difference between them?

Regarding the very important Arbitrage between IPE and NYMEX, since the specifications of oil do not match exactly, so it should be not permitted to take delivery from one market and sell it in the other right. Then how this arbitrage related?

Sorry about ask so many elementary questions, because I am really a green hand in this area, but really have interest to learn. Therefore, really hope that some one could help me.

Thanks very much!!!!

Anyone can help?

finamd said:

To tell you the truth, I do not think there is a critial mass as such. Granted. The rich do get richer, but there does not appear to me to be some magic threshhold of 5 or 10 million. Bank America is earning only 1.3% on their assets. Of course they do have a great deal of assets.

I will grant this much. It is difficult to make a decent return on less than about $25,000 in investments assets and one surely will not get rich on the returns. But then again no one is going to get rich on the returns of a $5 million investment either.

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er... sorry but did you post in a wrong place?