Cash and carry trade

[brainactive]

Bitcoin futures expiring 31 Dec 21 are currently 2.6% higher than spot price. This premium is around 15.5% annualized. Is this a good opportunity for a cash and carry trade by doing:
1) Long 1 BTC spot
2) Short 1 BTC futures contract expiring 31 Dec 21

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[adaseb]

Yes that’s exactly what cash and carry trade is. And yes that profit is possible however you need to account for fees  basically 4x. Since you are buying twice and selling twice. Plus any transaction fees to send the coins around.

However the premium is extremely low in my opinion. Back in Q2 the premium was more like 40% annualized. I remember back in March the June futures had a premium of 10% and I think it was something like 12% for ETH.
And for some alts like Litecoin the premium was even crazier like 70% annualized.

Basically if you see funding and premiums that high again, it means we are near the top.