Skip to main content
Learn

What Is the Relationship between the Basis and the Cost of Carry?

In theory, the basis (Spot Price - Futures Price) should equal the net cost of carrying the underlying asset over the contract's life.
Greeks.Live24.11.25

What Is the Relationship between the Basis and the Cost of Carry?

The basis is the difference between the spot price and the futures price. The cost of carry is the net cost of holding the underlying asset, including interest, storage, and insurance, minus any income generated.

In theory, the basis should equal the cost of carry over the life of the contract, assuming no arbitrage opportunities exist.

What Is the “Max Pain” Theory in Options Trading?
What Is the “Genesis to Functional” Theory in Crypto Regulation?
What Are the Best Practices for Setting the TWAP Time Period for Different Types of DeFi Applications?
Define ‘Contango’ in the Context of Futures Markets

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.