#SpotVSFutureStrategy

A spot vs. future strategy involves taking advantage of price differences between the spot market (where assets are bought/sold for immediate delivery) and the futures market (where assets are traded for future delivery at a predetermined price). Traders use this approach for arbitrage—buying in one market and selling in the other to lock in profits when discrepancies exist. Others use it for hedging against price volatility. The strategy relies on understanding the basis (difference between spot and futures prices), contract expiry, and margin requirements. When executed well, it can yield low-risk returns or protect portfolios from unfavorable price movements.