Futures basis refers to the difference between the price of a futures contract and the price of the underlying spot asset. This disparity reflects the costs and benefits associated with holding the asset until the futures contract expires, such as storage costs, interest rates, and expected dividends or premiums. A positive basis indicates the futures price is higher than the spot price, while a negative basis signifies the opposite.
Context
In the context of digital assets, futures basis is a key indicator for arbitrageurs and traders assessing market sentiment and potential trading opportunities. Its movements can signal expectations about future price trends and the availability of the underlying asset. Analyzing the futures basis is vital for understanding sophisticated trading strategies, risk management, and the overall health of derivative markets for cryptocurrencies.
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