Classic cash-and-carry
In traditional markets, cash-and-carry means holding the underlying and shorting a rich future to lock a basis that converges toward fair value as expiry approaches (subject to financing and storage). Reverse carry buys cheap futures and shorts or underweights cash when futures trade at a discount.
Crypto adapts this with spot vs dated futures, and with perpetual swaps that use funding payments instead of a single expiry convergence. Positive funding often means longs pay shorts — short-perp / long-spot style inventory can earn funding if the basis holds and you survive path risk.
The OptionsMatch basis desk is built for monitoring these relationships as research context across supported products.
Why it is not risk-free
Margin: the short leg can liquidate on a squeeze even if the long inventory is “safe” on another book. Cross-margin helps only inside one venue’s rules.
Operational: deposits, withdrawals, chain congestion, and venue halts break the assumption of continuous hedge adjustment. Borrow costs for shorts on spot-margin platforms change the edge.
Basis can widen against you before it converges. Mark-to-market pain is real even when eventual convergence is likely — your account may not live to eventual.
Perp funding vs dated basis
Dated futures basis is a term structure story toward a fixed expiry. Perp funding is a floating payment stream that can flip sign quickly. Do not treat average funding of last month as guaranteed future income.
During squeezes, funding can spike and short-perp carry can be highly profitable until it is not — liquidation risk rises with the same volatility that produces extreme funding.
Inventory unit (coin vs stable) and inverse vs linear contracts change how P&L lands in your wallet. Align mental accounting with product design.
Options overlays on carry books
Some desks buy puts or call spreads as tail protection on carry inventory, or sell options to enhance yield when they already like the basis. Complexity and greek risk rise fast.
A short call against long spot is a covered call overlay, not pure carry. A long put turns carry into a risk-defined band at the cost of premium — which may erase thin basis edges.
Master linear basis P&L and operational workflows before adding options. OptionsMatch strategy guides remain relevant, but basis is a different primary edge.
Multi-venue basis research
Different venues show different basis and funding. That can look like arb. Fees, transfer time, KYC friction, and withdrawal risk often consume the gap. See the cross-venue IV research guide for a parallel mindset: disagreement is not free lunch.
Execute carry where margin offsets are recognized. Splitting long spot and short futures across islands is a common way “arbitrageurs” discover correlation-of-failures in a crisis.
Use divergence and basis views on OptionsMatch for hypotheses; run a full cost model before capital commits.
Process checklist
1) Measure gross basis/funding. 2) Subtract fees, borrow, expected slippage. 3) Stress margin under historical vol. 4) Plan exits if basis widens. 5) Cap utilization. 6) Document venue rules for the products used.
Educational only: cash-and-carry teaches relative-value thinking between linear products. It is advanced because operational and liquidation risks dominate textbook convergence.
When options enter the stack, re-evaluate whether you still have a carry trade or a multi-leg speculative book wearing a carry costume.