# Basis

> The difference between the spot price of an asset and its futures price.

Canonical URL: https://business.fudfomo.co/glossary/basis
Source: What The Block! Dictionary v1.0 (last updated 2026-04-25), browsable at https://wtb.fudfomo.co.

## Definition

Basis is the gap between the spot price of an asset and the price of a futures contract on the same asset. When futures trade above spot, basis is positive (contango); when they trade below, it is negative (backwardation).

In crypto, basis is widely used as a proxy for market sentiment and as the foundation of carry trades. Traders go long spot and short futures when basis is wide enough to lock in a profit.

## Related terms

- [Futures](https://business.fudfomo.co/glossary/futures): A contract to buy or sell an asset at a fixed price on a future date.
- [Perpetual Futures](https://business.fudfomo.co/glossary/perpetual-futures): A futures contract with no expiry date. Common in crypto, kept in line with the spot price by funding payments.
- [Funding Rate](https://business.fudfomo.co/glossary/funding-rate): A periodic payment between long and short perpetual futures traders that keeps the contract close to spot.
- [OTC Desk](https://business.fudfomo.co/glossary/otc-desk): An over-the-counter trading desk that matches large crypto buyers and sellers off the public exchanges.

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