What is futures basis?
Basis is the price difference between a futures contract and its underlying spot index. When futures trade above spot, the market is in contango. When futures trade below spot, it’s backwardation.
PerpHQ focuses on annualized basis for dated futures (e.g., quarterly), which makes carry more comparable across expiries.
How to use basis (practically)
- Use basis to compare carry across venues and contracts—always consider time-to-expiry.
- Large positive basis can reflect strong demand for leverage and positive carry, but can compress quickly.
- Short-dated contracts can show large annualized swings (annualization amplifies short time windows).
Explore live basis snapshots here: All futures basis.
Cash-and-carry (checklist)
A simplified way traders think about cash-and-carry is: buy spot, sell futures, and hold to capture basis. In reality, your realized return depends on details.
- Fees (maker/taker), borrow costs, and funding (if you hedge with perps at any point).
- Margin rules and liquidation risk (basis can move against you).
- Operational details: settlement, contract specs, and execution quality.
Not investment advice. This is an educational overview only.