#SpotVSFuturesStrategy

Spot vs Futures Strategy

This is a trading strategy that relies on exploiting the differences between the spot market and the futures market. Traders use it to profit from price or funding structure discrepancies between the two markets, and it is often implemented in two ways:

1. Cash and Carry Arbitrage:

Buying the cryptocurrency from the spot market and simultaneously selling it in the futures market at a higher price. It is used when the futures contract price is higher than the spot price, ensuring a fixed profit upon contract expiration.

2. Reverse Arbitrage:

Selling the currency in the spot market and opening a buy position in the futures market when the futures contract is lower than the spot price.

The strategy is particularly effective in markets with a stable positive or negative funding rate.