#SpotVSFuturesStrategy 🔍 Spot vs. Futures — Core Differences

Feature Spot Market Futures Market

Delivery Immediate (T+0 or T+2) At a future date (contract expiry)

Leverage Rare or limited Common (up to 100x in crypto/commodities)

Pricing Market-determined Includes cost of carry, interest, sentiment

Ownership Real asset (BTC, stock, oil, etc.) Contract (obligation, no physical ownership)

Volatility Lower Higher (especially near expiry or rollovers)

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📈 Popular Spot vs. Futures Strategies

1. Cash and Carry Arbitrage

Buy Spot, Sell Futures (when futures are priced higher).

Profit = Futures Price – Spot Price – Costs (funding, fees).

Works best in contango markets (futures > spot).

2. Reverse Cash and Carry

Sell Spot, Buy Futures (when futures trade below spot).

Profit from backwardation (futures < spot).

More common in commodities and volatile assets.

3. Funding Rate Arbitrage (Crypto)

Long spot, short perpetual futures (collect funding rate).