#SpotVSFuturesStrategy

🔹 1. Spot-Futures Arbitrage

Objective: Earn risk-free or low-risk profit from price differences between spot and futures.

✅ Basic Steps:

1. Buy Spot (when futures are in premium – contango)

2. Short Futures (sell same amount in futures)

3. Hold until futures expire.

4. Profit = Futures premium - fees

✅ Example:

BTC spot = $60,000

BTC 1-month futures = $61,200

Difference = $1,200 (2% profit)

📌 This is called "cash-and-carry arbitrage"

🔹 2. Reverse Arbitrage

When futures trade at a discount (called backwardation.

1. Short Spot

2. Long Futures

3. Profit from convergence at expiry.