#SpotVSFuturesStrategy A "Spot vs Futures" strategy involves simultaneously trading an asset in the spot market (for immediate delivery) and the futures market (for future delivery at a predetermined price). This strategy often exploits price discrepancies between the two markets, which can arise due to factors like cost of carry (storage, insurance, interest) or temporary supply/demand imbalances.

Common applications include:

* Arbitrage: Profiting from temporary mispricings where the futures price deviates significantly from its theoretical fair value relative to the spot price. This involves buying low in one market and selling high in the other.

* Hedging: Using futures contracts to lock in a price for a future transaction, thereby mitigating price risk on an existing or anticipated spot position. For example, a producer expecting to sell a commodity in the future might short futures to protect against a price decline.