Definition
A basis trade is a strategy that profits from the spread between a spot price and a futures price for the same underlying asset. In crypto, cash-and-carry basis trades have been a dominant institutional strategy, involving buying spot and selling futures (or vice versa) to capture the funding rate or term premium as the futures price converges to spot at expiry. Basis trades require multi-venue coordination, capital efficient settlement, and precise execution, and they benefit materially from atomic settlement rails and prime brokerage arrangements that reduce pre-funding drag.
Example
A trader buys 100 BTC spot at $95,000 and simultaneously sells 100 BTC quarterly futures at $97,000. If spot and futures converge at expiry, the trader captures the $2,000 basis per BTC as profit, minus financing and execution costs.
How Liquid Mercury Handles This
Mercury Pro supports multi-venue execution across spot and derivatives venues with consolidated position tracking, so institutional basis traders can execute both legs from a single OMS with unified risk management.