Trading term
What is Cash-and-carry?
A cash-and-carry is a trade that buys an asset and sells a dated futures contract on it at the same time, then holds both to expiry. The two legs close at the same price on settlement day, so the trader keeps the gap between the futures price and the spot price — the basis — as a return that is known on the day the trade is put on.
The trade exists because a dated future must settle at the spot price when it expires. If the future trades above spot today, you can buy the asset, sell the future against it, and wait: whatever price does in between, on expiry the long and the short cancel and you are left with the difference you locked in. Annualize that difference and it is a yield, which is why the trade is compared with T-bills rather than with a long position.
On crypto quarterlies the basis is almost always positive, so the trade is almost always available; whether it is worth doing depends on the rate. In 2021, with bills paying nothing, a 10% or 20% basis was free money and the trade was crowded. Through most of 2022 and 2023 the basis sat under a 4-5% bill and the trade lost to cash. In 2024 a hot market pushed the basis back above the bill, and by 2026 it was under it again. The carry is what leverage costs, and leverage cannot cost much more than money for long, because this trade is what closes the gap.
For example
Bitcoin spot is $77,300 and the quarterly future expiring in 104 days is $78,300, a gap of 1.3%. Buy one bitcoin, sell one future. On expiry both settle at whatever spot is, and the $1,000 gap is the return: 1.3% over 104 days, about 4.7% a year, against a 3-month T-bill at 3.9%.
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Explore Premium →Why it matters to you
It is the closest thing crypto has to a bond, and it is the mechanism that keeps the basis honest. Knowing that the basis is a rate someone can lock — and that they will, whenever it sits far above cash — is what turns a 'high basis is bullish' reflex into a reading of what leverage costs and who is paying it.
⚠ Counting the gross gap as the return
The gap at entry is the return before fees, before the margin the short leg has to post, and before anything that goes wrong holding both legs to the day. On a perpetual there is no expiry, so the same trade collects funding instead and its return is not known in advance. And a negative basis can have a mechanical cause — spot carrying a fork or airdrop claim the future does not — in which case the 'free' gap is paying for something real.