What Is a Cash-and-Carry Trade? Crypto Basis Trade Guide

A cash-and-carry trade is a delta-neutral strategy that buys an asset on the spot market and shorts the same amount in futures or perpetual futures to earn the price difference or the funding rate. Because the two legs offset each other, the trade has little exposure to the asset's price. It is also called the basis trade.

Key takeaways

• Structure: long spot + short futures or perps, in equal size.
• With dated futures, the return is the basis locked in at entry.
• With perpetual futures, the return is funding received by the short.
• It is delta-neutral: price moves on the two legs cancel out.
• Key risks are short-leg liquidation, negative funding, fees and exchange risk.

How the trade works

1. Buy the asset on spot, for example 1 BTC.
2. Short the same amount of BTC futures or perps.
3. Hold until expiry (dated futures) or while funding stays attractive (perps).
4. Close both legs, or let the dated future settle and sell the spot.

When futures trade above spot, a market is in contango. The short future is "overpriced" relative to spot, and that premium is what the trade captures.

Dated futures vs perpetual version

Feature	Dated futures version	Perpetual version
Source of return	Basis at entry	Ongoing funding payments
Return known at entry	Yes, if held to expiry	No, funding changes every interval
Holding period	Fixed, until expiry	Open-ended
Main extra risk	Early exit at a worse basis	Funding turning negative
Rolling	Needed at each expiry	Not needed

Worked example: dated futures

BTC spot is $50,000 and a future with 90 days to expiry trades at $51,000. You buy 1 BTC spot and short 1 BTC of the future.

The basis is $1,000, or 2%. Annualized: 2% × 365 ÷ 90 ≈ 8.1%.

At expiry the future settles at the spot price. Whatever that price is, the result is the same:

BTC at expiry	Spot PnL	Short future PnL	Total
$45,000	−$5,000	+$6,000	+$1,000
$50,000	$0	+$1,000	+$1,000
$55,000	+$5,000	−$4,000	+$1,000

Now include entry fees (spot 0.10%, futures 0.05%) and the capital needed. Assume you post $10,000 margin for the short, so total capital is $60,000.

Item	Amount
Locked-in basis	+$1,000.00
Spot buy fee: $50,000 × 0.10%	−$50.00
Futures short fee: $51,000 × 0.05%	−$25.50
Net before exit costs	+$924.50

That is about 1.54% on $60,000 in 90 days, or roughly 6.2% annualized. The margin requirement lowers the return on total capital compared with the headline basis. Try different inputs in the basis calculator.

The perpetual version

With perps there is no expiry, so there is no locked basis. Instead, the short collects funding when the rate is positive. At the common baseline of 0.01% per 8 hours, that is about 10.95% APR on the notional. The rate can rise far above that when longs are crowded, and it can also turn negative, in which case the short pays.

Funding on many CEXs is paid every 8 hours, while perp DEXs such as Hyperliquid pay hourly. Compare rates on the same basis with the funding rate calculator or on the live funding rates page.

Risks

1. Short-leg liquidation: in a sharp rally, the short loses money and may be liquidated while the gain sits in the spot wallet. Lower leverage on the short reduces this risk. See liquidation.
2. Negative funding on the perpetual version.
3. Basis moves before expiry: closing early can lock in a smaller or negative result.
4. Fees and slippage on up to four fills.
5. Counterparty risk at the exchanges holding the spot and the margin.

Finding cash-and-carry opportunities

ArbTide ranks coins by funding and spot-perp spreads. See the cash-and-carry strategy page for live candidates and the methodology for how rates are normalized.