#SpotVSFuturesStrategy is a trading strategy that exploits the differences between the spot price (the current price of an asset) and the futures price (futures). Here is a clear overview of this strategy, often used in cryptocurrencies, stocks, and commodities.

💡 Objective of the Spot vs Futures Strategy

To exploit the price gap (spread) between the spot market and the futures market. This gap is often referred to as the basis.

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📈 Examples of Strategies

1. Cash & Carry Arbitrage (bull market)

• When? The futures contract is more expensive than the spot (contango).

• How?

• Buy the asset on the spot.

• Sell an equivalent futures contract.

• Upon expiration, deliver the asset and pocket the difference.

• Goal: Take advantage of the price difference without directional exposure.

2. Reverse Cash & Carry Arbitrage (bear market)

• When? The futures contract is cheaper than the spot (backwardation).

• How?

• Sell the asset on the spot (short).

• Buy a futures contract.

• Upon expiration, buy back the asset via the cheaper contract.