{"slug":"cash-and-carry","term":"Cash-and-Carry (Basis Trade)","category":"Derivatives","definition":"Cash-and-carry buys the asset in spot and sells the same amount in futures, locking in the basis — the gap between the futures price and spot — as a return regardless of direction. On perpetuals the same idea collects funding: long spot, short perp, and the funding payments are the yield.","street":"You do not care where price goes; you are being paid the gap between two prices of the same thing. The catch is the size of the gap and how long it holds.","depth":["Worked example: spot at $80,000, the quarterly future at $81,600 with 90 days to go. Buy spot, sell the future, and the $1,600 converges to zero at expiry — a 2% return over the quarter, about 8% annualised, regardless of price. The perpetual version replaces the fixed basis with funding: if longs pay 0.03% every 8 hours, the spot-long, perp-short pair collects about 33% a year while it lasts. Our price tape shows each venue's perp against spot so you can see where the basis is widest.","The risks are the ones the return hides: funding can flip negative and the carry becomes a cost; the exchange holding your short can go down; the perp can squeeze far above spot before converging, and a short with insufficient margin gets liquidated on a trade that was mathematically fine. Size the short to survive the widest basis you have seen, not the average."],"live":{"label":"Basis per venue on the price tape","href":"/tools/venue-divergence"},"related":["basis","funding-arbitrage","funding-rate","perpetual-futures","venue-arbitrage"]}