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Basis Trade
A strategy that profits from the price difference between a futures contract and the spot asset.
A basis trade seeks to profit from the price difference (the "basis") between a futures or perpetual contract and the underlying spot asset, typically by simultaneously holding an offsetting position in both, rather than betting on the asset's price direction.
This is generally considered a relatively lower-directional-risk strategy, though it still carries counterparty, execution, and funding-rate risk.
Examples
- A basis trade might hold a spot position and an offsetting short futures position to capture the price gap between them.
- Basis trades aim to profit from the price relationship, not the asset's overall direction.