#SpotVSFuturesStrategy

A Spot vs. Futures trading strategy involves leveraging differences between the spot market (immediate asset purchase) and the futures market (contracted future delivery). In crypto, traders often use this strategy to exploit price discrepancies or hedge positions. For example, when a futures contract trades at a premium to the spot price (contango), a trader might buy the asset on the spot market and short the futures contract—locking in a risk-free profit, known as cash-and-carry arbitrage. Conversely, during backwardation (futures below spot), reverse strategies apply. This method reduces directional risk and allows traders to benefit from funding rate dynamics or price convergence. Spot vs. Futures strategies require precise timing, capital efficiency, and risk management, making them popular among advanced traders.