What is a basis trade in crypto?

A basis trade captures the price gap — the basis — between an asset's spot price and the price of a dated future on that same asset. When the future trades above spot (contango), you buy the asset in spot and short the dated future in equal size. The position is delta-neutral, so price direction is hedged away. As the future approaches expiry its price must converge to spot, and that convergence is the profit. The classic name for it is cash-and-carry. It is educational information, not a recommendation.

How is a basis trade different from funding-rate capture?

They share the same delta-neutral shape — long spot, short a derivative — but they run on different clocks and are paid by different mechanisms. A basis trade uses a dated future with an expiry date, and the return is set by the price gap you enter at: if you hold to expiry, the gross payoff is essentially known when you open the trade. Funding capture uses a perpetual future, which never expires; instead an explicit funding payment is exchanged between longs and shorts every settlement (every eight hours on Binance) to keep the perpetual tethered to spot. That stream is not locked in — it is re-priced every settlement and can turn negative and cost you money.

When does each one actually pay?

A basis trade pays when a dated future trades at a premium to spot and that premium is wide enough to survive the trading costs on both legs. The rate is fixed at entry and realised through convergence, so the trade pays on the market's schedule, not yours: your capital is committed to a fixed term, and you must either hold to expiry or roll into the next contract. Funding capture pays whenever the funding rate is positive — which is most of the time, because the crowd is usually net-long — and it pays continuously rather than at a deadline. There is no expiry, no roll and no forced exit, but there is also no locked-in rate: when the market flips net-short, funding inverts and the hedged short pays instead of earns.

Why does Fygga measure funding rather than the basis?

Because funding is directly and continuously observable, which makes it honestly measurable. Every perpetual publishes a funding rate every settlement, so the research harness reads one public series per symbol — Fygga's backtest uses Binance USDⓂ-M daily closes plus funding rates across five liquid pairs over 1,636 days. Reconstructing a basis-trade record instead would mean modelling a term structure of expiring contracts and every roll between them, where the result depends heavily on which contract you picked and when you rolled. That is a different and much more assumption-heavy research problem, and Fygga has not done it.

Does Fygga publish basis-trade returns?

No, and that is deliberate. Fygga has never backtested a basis trade, so no basis-trade performance figure exists in its data and none is shown anywhere on this site. Every published number describes delta-neutral funding capture. In the committed backtest, gross funding accrual over 2022–2026 was +19.3% (about 4% a year) before costs, and the honest net at a weekly rebalance cadence was +2.8% total with a -5.3% maximum drawdown. Those are historical funding-capture backtest figures, not basis-trade figures and not a promise of future returns. Past performance is not indicative of future results.

// Learn

What is a basis trade (spot–futures basis)?

The basis trade and funding capture look like the same trade and are not. Both are delta-neutral; they run on different clocks and get paid by different mechanisms. Here is what the basis is, when each one actually pays, and why Fygga’s research measures funding specifically.

Educational information only — not financial advice, not a forecast, and not a signal. All figures are from a historical backtest. Past performance is not indicative of future results.

What “the basis” is

The basis is the gap between an asset’s spot price and the price of a dated future on that same asset — a contract with a fixed expiry. When the future trades above spot, the market is in contango and the basis is positive; when it trades below, that is backwardation.

A future has to be worth exactly the spot price on the day it expires, because on that day they settle to the same thing. So a positive basis is a gap with a deadline attached: it must close. The basis trade, also called cash-and-carry, is the trade that harvests that closure. You buy the asset in spot and short an equal amount of the dated future. Price direction cancels between the two legs — the same delta-neutral construction used everywhere in this research — and what is left is the convergence of the two prices as expiry approaches.

Basis trade vs funding capture: same shape, different clock

Both trades are long spot and short a derivative, and both are delta-neutral. The difference is what tethers the derivative to spot, and that difference changes everything about how you get paid.

A dated future is tethered by its expiry. No payment is exchanged along the way. The contract simply must equal spot on a known date, so the price gap you entered at is the gross return — known, in principle, the moment you open the trade, provided you hold to expiry.
A perpetual has no expiry, so it is tethered by a payment. That payment is the funding rate, exchanged directly between longs and shorts every settlement — every eight hours on Binance. Nothing is locked in: the rate is re-quoted continuously and can flip sign.

So the basis trade is a fixed-term position with a rate known at entry, and funding capture is an open-ended position with a floating rate. One is a deadline; the other is a stream.

When each one actually pays

Neither pays all the time, and they fail in different ways — which is the practical reason to know the difference.

The basis trade pays when the dated future is at a premium wide enough to clear the trading costs on both legs — and it pays on the contract’s schedule, not yours. Your capital is committed for a fixed term, and at expiry you either take the money and stop or roll into the next contract at whatever basis exists then, which may be far thinner. Entry timing dominates the outcome, because the rate is set once, at entry.
Funding capture pays whenever funding is positive — usually, because leverage-hungry long demand is structurally persistent, so someone has to be paid to take the short side. It accrues continuously, with no expiry, no roll and no forced exit. The cost of that flexibility is that nothing is guaranteed: when the market flips net-short, funding inverts and the hedged short pays rather than earns.

Both are exposed to the same unglamorous killer: two-leg trading costs. Each of these edges is thin per period, so how often you touch the position decides whether anything survives — a point Fygga’s own funding backtest makes brutally, below.

Why Fygga’s harness measures funding specifically

Fygga researches funding capture rather than the basis trade for a measurement reason, not a claim about which is better. Funding is published, per symbol, every settlement. That makes it a single continuous public series a research harness can read directly and a reader can re-derive. Fygga’s backtest does exactly that: Binance USDⓂ-M daily closes plus funding rates, five liquid pairs, 1,636 days across 2022–2026.

Reconstructing a basis-trade record honestly is a materially harder problem. There is no single series to read — you would have to model a term structure of expiring contracts and every roll decision between them, and the result would depend heavily on which contract was held and when it was rolled. Those are assumptions, and assumptions are exactly what a backtest is worst at being trusted about.

What that means for the numbers on this site

Fygga has never backtested a basis trade, so no basis-trade return is published anywhere on this site. Every figure Fygga reports describes delta-neutral funding capture. We would rather name a gap in the research than fill it with a number we did not measure.

The numbers Fygga does have — for funding capture

Over 2022–2026 on real Binance history (1,636 days, five liquid pairs), gross funding accrual before costs was +19.3% — about ~4%/yr. That figure proves the market-neutral edge exists in isolation; it is not achievable, because it charges nothing for trading. With realistic costs on both legs, the honest net at a weekly hold-and-adjust cadence was +2.8% total with a -5.3% maximum drawdown.

The cadence sweep is the finding worth carrying to any delta-neutral trade, basis included. Rebalancing the same strategy daily turned it into -19.1% — a cost drag of 8.7%/yr against an edge worth roughly ~4%/yr gross. Weekly costs 2.1%/yr; biweekly costs 1.1%/yr and returned +4.6%. Nothing about the edge changed between those three runs — only how often the position was touched.

These numbers reproduce the committed backtest on the results page exactly, and the method is written up on the methodology page. They describe funding capture, not a basis trade. These are historical backtest figures, not a promise of future returns — past performance is not indicative of future results.

What a basis trade does not remove

Delta-neutral removes price direction. It does not remove:

Roll risk. A dated position has to be closed or rolled. The basis available at the next roll is unknown, so a strategy that looks like a fixed rate is really a chain of unknown future rates.
Margin and mark-to-market risk. The gap can widen before it closes. Convergence is certain at expiry; it is not monotone on the way there, and a short leg that moves against you can require margin long before the trade is right.
Cost risk. Two legs, opened and closed, plus every roll. A thin premium and an active hand are enough to turn a positive gross edge negative — which is precisely what the daily-cadence run above did.
Exchange and counterparty risk. The capital sits with a venue that can fail, freeze withdrawals, change margin rules or auto-deleverage a position. Hedging price direction does nothing about that.

The honest summary: a basis trade is a lower-drama position than a directional bet, not a risk-free one. This is educational information, not financial advice.

Go deeper

The delta-neutral explainer covers the hedge both trades share; the funding-capture explainer covers the mechanism Fygga actually measures; the results page has the full cost-sensitivity table; and the funding monitor shows what perpetual funding is doing right now.

Funding-rate capture →What is delta-neutral?See the backtest See live funding rates

Frequently asked questions

What is a basis trade in crypto?: A basis trade captures the price gap — the basis — between an asset's spot price and the price of a dated future on that same asset. When the future trades above spot (contango), you buy the asset in spot and short the dated future in equal size. The position is delta-neutral, so price direction is hedged away. As the future approaches expiry its price must converge to spot, and that convergence is the profit. The classic name for it is cash-and-carry. It is educational information, not a recommendation.
How is a basis trade different from funding-rate capture?: They share the same delta-neutral shape — long spot, short a derivative — but they run on different clocks and are paid by different mechanisms. A basis trade uses a dated future with an expiry date, and the return is set by the price gap you enter at: if you hold to expiry, the gross payoff is essentially known when you open the trade. Funding capture uses a perpetual future, which never expires; instead an explicit funding payment is exchanged between longs and shorts every settlement (every eight hours on Binance) to keep the perpetual tethered to spot. That stream is not locked in — it is re-priced every settlement and can turn negative and cost you money.
When does each one actually pay?: A basis trade pays when a dated future trades at a premium to spot and that premium is wide enough to survive the trading costs on both legs. The rate is fixed at entry and realised through convergence, so the trade pays on the market's schedule, not yours: your capital is committed to a fixed term, and you must either hold to expiry or roll into the next contract. Funding capture pays whenever the funding rate is positive — which is most of the time, because the crowd is usually net-long — and it pays continuously rather than at a deadline. There is no expiry, no roll and no forced exit, but there is also no locked-in rate: when the market flips net-short, funding inverts and the hedged short pays instead of earns.
Why does Fygga measure funding rather than the basis?: Because funding is directly and continuously observable, which makes it honestly measurable. Every perpetual publishes a funding rate every settlement, so the research harness reads one public series per symbol — Fygga's backtest uses Binance USDⓂ-M daily closes plus funding rates across five liquid pairs over 1,636 days. Reconstructing a basis-trade record instead would mean modelling a term structure of expiring contracts and every roll between them, where the result depends heavily on which contract you picked and when you rolled. That is a different and much more assumption-heavy research problem, and Fygga has not done it.
Does Fygga publish basis-trade returns?: No, and that is deliberate. Fygga has never backtested a basis trade, so no basis-trade performance figure exists in its data and none is shown anywhere on this site. Every published number describes delta-neutral funding capture. In the committed backtest, gross funding accrual over 2022–2026 was +19.3% (about 4% a year) before costs, and the honest net at a weekly rebalance cadence was +2.8% total with a -5.3% maximum drawdown. Those are historical funding-capture backtest figures, not basis-trade figures and not a promise of future returns. Past performance is not indicative of future results.

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This page is educational information only — not financial advice, not a forecast, and not a signal. All figures come from a historical backtest and simulation; no live trading, no signal service, and no capital is managed. Past performance is not indicative of future results.