A Spot vs. Futures strategy exploits price discrepancies between an asset's immediate (spot) price and its future (futures) price. The core idea is to capitalize on the "basis," the difference between these two prices.
A common application is "cash-and-carry" arbitrage: if the futures price is significantly higher than the spot price plus carrying costs (interest, storage), one can buy the asset in the spot market and simultaneously sell a futures contract. At expiry, the spot asset is delivered against the futures contract, locking in a risk-free profit. Conversely, "reverse cash-and-carry" involves shorting the spot and buying futures if the futures price is too low. This strategy relies on market inefficiencies and converges as expiration approaches.$BTC
