What Is a “Cash-and-Carry” Trade in This Context?

A cash-and-carry trade is an arbitrage strategy where a trader simultaneously buys the underlying asset in the spot market (the "cash" leg) and sells a futures contract (the "carry" leg). In the context of perpetuals with a high positive funding rate, the trader profits by collecting the funding rate payments while the spot and futures positions hedge each other, effectively locking in a risk-free profit.