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What is a basis trade in crypto?

The basis trade in crypto isn’t all it’s cracked up to be on paper, according to David Mercer, CEO, LMAX Group. The basis trade involves buying a commodity at spot (taking a long position) and simultaneously establishing a short position through derivatives like options or futures contracts

What is a basis trade in Bitcoin?

Some have risk/reward ratios that are too attractive to ignore. Perhaps the most significant of these is what’s referred to as the basis trade in bitcoin. The basis trade involves buying a commodity at spot (taking a long position) and simultaneously establishing a short position through derivatives like options or futures contracts.

What is a basis trade & how does it work?

“That means the so-called basis trade, whereby a speculator buys Bitcoin in the spot market and sells long-dated futures to lock in the discrepancy between the two prices, has turned back on,” according to Bloomberg.

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