#SpotVSFuturesStrategy A Spot vs Futures Strategy on Binance (or any other crypto exchange) involves using the spot market and the futures market in a coordinated way to take advantage of price discrepancies, hedging, or arbitrage opportunities. Here are some of the most common strategies:
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🔁 1. Cash-and-Carry Arbitrage (Market-Neutral)
Goal: Profit from the price difference between futures and spot markets.
When to Use: When futures price > spot price (futures in contango).
How it works:
Buy the asset in the spot market (e.g., BTC/USDT).
Short the equivalent amount in the futures market (e.g., short BTCUSDT perpetual or quarterly).
Hold until futures contract expires or until convergence.
On expiry: Deliver the spot asset to settle the futures short. Profit = futures premium - fees - funding.
Example:
BTC spot = $60,000
BTC futures (3-month) = $62,000
Premium = $2,000
If you buy 1 BTC spot and short 1 BTC in futures, you lock in ~$2,000 in risk-free profit (minus fees and funding).
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🔁 2. Reverse Cash-and-Carry Arbitrage
Goal: Profit from backwardation (futures price < spot).
When to Use: When futures price < spot price (rare in crypto).
How it works:
Short the asset in the spot market (if possible).
Go long in the futures market.
On expiry: Buy back spot to cover short. Profit from convergence.
Note: Shorting spot isn't always easy unless margin trading is enabled.
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🛡 3. Hedging Strategy
Goal: Protect against downside in a long-term spot position.
How it works:
Hold a spot asset (e.g., ETH).
Open a short futures position for the same amount.
Net exposure becomes neutral.
If ETH goes down, your spot loses value, but your futures short gains.
Use Case: You’re long-term bullish on ETH but want to hedge short-term volatility.
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📈 4. Basis Trading
Goal: Trade the spread between spot and futures prices.
How it works:
Track the basis = (Futures Price - Spot Price) / Spot Price.
Go long/short based on expected convergence/divergence.
More dynamic than fixed arbitrage; often used by more advanced trade.
